Markets Show Mixed Performance Amid Fed Speculations

Indices fluctuated as Nasdaq rose, Dow fell, and sectors like tech gained. Fed rate cuts remain likely with consumer sentiment improving.

The tech-heavy Nasdaq climbed 159.05 points (0.8%) to 19,859.77. The S&P 500 also rose 15.16 points (0.3%) to 6,090.27 but the Dow fell 123.19 points (0.3%) to 44,642.52.

The uptick by the unemployment rate increased confidence the Federal Reserve will lower interest rates by another 25 bps later this month.

"Despite the strong headline number this morning, the Fed is likely to note the overall slowing in the job market and cut rates by 25 bps in 2 weeks, unless the next CPI report is white hot," said Chris Zaccarelli, Chief Investment Officer, Northlight Asset Management. He added, "Given the positive backdrop of strong economic growth, a healthy labor market, and inflation that is relatively contained, the Fed can keep cutting rates and that should allow the bull market to run into the end of the year and into early next year."

University of Michigan released a report its consumer sentiment index climbed to 74 in December from 71.8 in November. Year-ahead inflation expectations jumped to 2.9% in December from 2.6% in November.

Computer hardware stocks saw strong gains, with the NYSE Arca Computer Hardware Index up 2.1%, led by Hewlett Packard Enterprise's 10.6% surge after a Citigroup upgrade. Retail stocks rose by 1.8% by Dow Jones U.S. Retail Index. Oil service stocks plunged 3.5% by the Philadelphia Oil Service Index. Oil producer stocks was under pressure due to decrease by the price of crude oil while notable weakness also emerged among natural gas, steel and gold stocks.

Asia-Pacific stocks were mixed, with Japan's Nikkei down 0.8% and China's Shanghai Composite up 1.1%. European markets also varied as France's CAC rose 1.3%, Germany's DAX edged up 0.1%, and the U.K.'s FTSE slipped 0.5%.

In the bond market, treasuries moved to the upside after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.9 basis points to 4.15%.

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