Stocks continued to hover on Friday in midday trading, showing little direction ahead of a U.S. long weekend and with little economic news for investors to chew on but plenty of uncertainty in Europe.
At noon, the Dow Jones industrial average was down 16 points or 0.1 per cent, to 12,514. The broader S&P 500 was up 2 points or 0.2 per cent, to 1,323. In Canada, the S&P/TSX composite index was down 12 points or 0.1 per cent, to 11,554.
To be sure, the University of Michigan's consumer confidence index rose to its highest level since October 2007, hitting 79.3 in May for its ninth straight increase. But the surprising gain had little impact on stocks.
Indeed, investors seemed to prefer defensive holdings, suggesting ongoing concern about the global economy. Within the S&P 500, telecom, utilities and health-care stocks showed modest gains. On the other hand, cyclical stocks – materials, technology stocks and industrials – dragged on performance.
Within the Canadian benchmark index, financials were the biggest drags, falling 0.9 per cent, and industrials fell 0.8 per cent. Commodity producers were relatively strong, though: Energy stocks and materials showed slight gains, following upward moves by gold and crude oil. Gold was recently spotted at $1,565 (U.S.) an ounce, up $8. Oil traded at $90.98 a barrel, up 32 cents.
Meanwhile, action in the bond market reflected concerns about Europe. In Spain, the yield on the government 10-year bond rose 15 basis points (there are 100 basis points in a percentage point), to 6.3 per cent – which places borrowing costs in what is considered to be unsustainable territory. The yield on Italy's 10-year government bond rose to 5.64 per cent, up 10 basis points. Investors preferred the safety of U.S. bonds, sending the yield on the 10-year Treasury bond down 3 basis points, to 1.74 per cent.
European indexes finished the week on a quiet note, though. The U.K.'s FTSE 100 was relatively unchanged while Germany's DAX index rose 0.4 per cent.