Wall Street edges higher ahead of long weekend

• The Dow fell 0.17%, S&P 500 dropped 0.06%, and Nasdaq declined 0.06% on Friday, with weekly losses of 0.29%, 0.38%, and 0.66% respectively
• Small-cap Russell 2000 reached a record closing high and gained 2.04% for the week as investors shifted money from heavyweight tech names to undervalued areas
• Financials posted their biggest weekly decline since October despite mostly solid bank earnings, while chip stocks rose 1.2% on Friday extending Thursday's gains

Market Summary: Wall Street edges higher ahead of long weekend

Market Performance:

U.S. stocks closed nearly flat on Friday, January 16, ahead of the Martin Luther King Jr. holiday weekend. The Dow fell 0.17% to 43,359.33, while the S&P 500 and Nasdaq both declined 0.06% to 6,940.01 and 23,515.39, respectively. All three major indexes posted weekly losses: S&P 500 down 0.38%, Nasdaq down 0.66%, and Dow down 0.29%.

Sector Highlights:

Chip stocks led gains, with the SOX semiconductor index rising 1.2%, extending Thursday's momentum. Healthcare fell 0.8%, leading Friday's declines among S&P 500 sectors. Financial stocks posted their biggest weekly percentage decline since October despite solid Q4 earnings from major U.S. banks.

The small-cap Russell 2000 reached a record closing high and gained 2.04% for the week, as investors rotated from heavyweight tech stocks into more undervalued mid- and small-cap names. Real estate, consumer staples, and industrials led weekly sector gains.

Market Outlook:

The earnings season intensifies next week with reports from Netflix, Johnson & Johnson, and Intel. Analysts noted choppy trading is typical for mid-January, with historical patterns suggesting improved performance toward month-end.

Anthony Saglimbene of Ameriprise Financial noted that maintaining the S&P 500 near 7,000 is viewed favorably by most investors. Market participants cited caution ahead of the long weekend and monthly options expiration as factors contributing to tight trading ranges.

Volume was light at 18.77 billion shares, with declining issues outnumbering advancers 1.19-to-1 on the NYSE.