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Stocks fall amid volatile week on Wall Street

U.S. stocks slipped Friday after two previous sessions of advances.

The S&P 500 (^GSPC) fell 0.12%, or 3.09 points, as of market close. The Dow (^DJI) declined 0.33%, or 76.42 points, after adding a combined 1,346.62 points over the past two trading sessions. The Nasdaq (^IXIC) edged higher by 0.08%, or 5.03 points. Each of the three major indices wobbled between gains and losses throughout Friday’s session. 

Stocks are currently trading in the seven-session period often referred to as a “Santa Claus rally,” an annual event spanning the last five sessions of the year through the first two sessions of the new year during which equities tend to rise. The S&P 500 has averaged a 1.7% gain and traded higher about 78% of the time during this period since 1928, analysts from Oppenheimer wrote in a note Wednesday.

An ongoing partial government shutdown is so far doing little to rattle broader markets. Historically, this has tended to be the case, with the S&P 500 rising during each the last five shutdowns in 2018, 2013 and 1995.

The current shutdown, which began after funding for nine government departments ran out on December 21, is likely to continue into 2019. Both the Senate and House of Representatives held brief sessions Thursday afternoon, but neither chamber took any votes on a funding agreement. President Donald Trump and congressional Democrats have been in a deadlock over providing billions of dollars for Trump’s proposed wall at the southern border, which the president has made a contingency for signing any funding measures.

Trump on Friday threatened to close the southern border of the U.S. unless Congress agrees to provide his requested $5 billion in taxpayer funds for a wall with Mexico.

According to recent reports, about 800,000 workers are directly impacted by the shutdown, with approximately half of these individuals expected to work without pay. These 800,000 workers comprise about 35% of the federal civilian workforce, and non-defense federal spending represents about 2.6% of total GDP, according to analysts from JPMorgan.

On net, each week that the government is closed would reduce annualized GDP growth by about 0.1 to 0.2 percentage points, the analysts estimate. This considers the hours of the employees working without pay, which would likely still be counted in GDP.  However, any drag from the shutdown would reverse once the government reopens, the analysts added. JPMorgan has kept its real GDP growth forecasts for the fourth quarter of 2018 and first quarter of 2019 unrevised at 2.5% and 2.25%, respectively.

STOCKS: Tesla names Oracle, Walgreens Boots Alliance executives to board

Tesla (TSLA) a said in a statement that it has named Larry Ellison, the founder of Oracle (ORCL), and Kathleen Wilson-Thompson, global chief human resources officer at Walgreens Boots Alliance (WBA), as new independent directors to its board. Ellison previously said during a call with investors in October that Tesla is his second-largest investment. Tesla and CEO Elon Musk agreed to appoint a new chairman and two independent board members following an SEC lawsuit that alleged Musk defrauded in a tweet about taking the company private at $420 per share. Robyn Denholm, an existing board member, was named chairwoman of the board in November. Shares of Tesla rose 5.61% to $333.87 per share as of market close.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 27, 2018. REUTERS/Eduardo Munoz

Green Growth said on Thursday that it planned to make a hostile takeover bid for Aphria (APHA) in an all-stock deal valuing the Canadian cannabis company at $2.1 billion. The U.S. cannabis operation said its offer values Aphria at C$11 per share, or about 46% upside to the company’s closing price on December 24. However, Aphria said in a statement Friday that the proposal “significantly undervalues” the company, although it created an independent committee of directors to consider the proposal, it said. Shares of Aphria rose 12.39% to $6.26 each as of market close. Peer pot stocks including Tilray (TLRY), Cronos Group (CRON) and Canopy Growth Corporation (WEED.TO, CGC) also edged higher.

Lockheed Martin (LMT) received a $712 million U.S. defense contract in order to develop advanced hardware to support the F-35 Lightning II aircraft, the Pentagon said on Thursday. This follows a $997 million U.S. defense contract awarded to Lockheed Martin for the upgrade of 84 F-16 aircrafts to the V-configuration, which was announced December 20. Shares of Lockheed Martin rose 0.56% to $261.24 each as of market close.

ECONOMY: Chicago Business Barometer rose more than expected in December

The MNI Chicago Business Barometer registered at 65.4 in December, exceeding expectations of 60.2, according to Bloomberg data. In November, the index posted a reading of 66.4, which had been an 11-month high. The index measures the economic health of the Chicago-region manufacturing sector, and readings above 50 indicate expansion.

Pending home sales fell 0.7% in November, according to a report Friday from the National Association of Realtors. This follows a decline of 2.6% in October. Consensus estimates had been for an increase of 1% in pending homes sales for the month of November, according to Bloomberg data. The NAR’s pending home sales index is based on signed real estate contracts for existing single-family homes, condos and co-ops and predicts future sales in the housing market. Pending home sales fell in all four major regions compared to a year ago, with pending sales in the West experiencing the biggest annual decline. However, NAR chief economist Lawrence Yun noted that the latest results imply “more short-term pullback in the housing sector” and do not yet take into account recent, more favorable mortgage rate conditions.

Advanced trade data and inventories will not be released by the Census Bureau on Friday due to the ongoing government shutdown.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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