Stocks finished lower Friday as investors weighed rising geopolitical tensions in the Middle East and a disappointing factory data report. The Dow fell 233 points, to end the week down less than 0.1%. The S&P 500 lost 0.7% to finish the week 0.2% lower, while also snapping a five week winning streak. The Nasdaq Composite dipped 0.8%, however eked out a 0.2% gain for the week.
U.S. officials confirmed reports that they conducted an airstrike in Baghdad, killing a top Iranian military general. WTI crude advanced 3.0% to $63.05/barrel, briefly touching its highest level since April. Perceived safe haven assets caught a bid, as COMEX gold added 1.5% to $1,551.50/ounce, near its best level in six years. Treasuries strengthened the most in a month, with the yield on the 10-year note sliding nine basis points to 1.79%.
On the data front, the ISM’s gauge of manufacturing activity dropped to 47.2 in December, the worst reading since June 2009 and marking the fifth-straight month of contraction. Separately, construction spending rose 0.6% in November, rebounding from the prior month’s modest 0.1% uptick. In central bank news, the minutes from the December Federal Reserve meeting showed officials believe the current monetary policy is likely to remain appropriate “for a time.”
Nine of 11 S&P 500 sectors finished lower with only the defensive Utilities and Real Estate groups advancing. Financials performed the worst amid the drop in Treasury yields. The jump in oil prices also pressured airlines, with American Airlines losing nearly 5.0%.