Signs of Slow Growth Send Dow Up 23
Technology shares sagged on the latest earnings news, but the rest of the stock market advanced broadly Friday as interest rates fell amid fresh signs of a moderating economy.
The Dow Jones industrial average rose 23.67 points to 5,689.45, about 10 points shy of its high on the session. For the week, the blue-chip index was up 8.14 points.
Also cheering the market Friday were reports that net inflows into stock mutal funds so far in August look to be on a par with June’s $15.5 billion after a weak July.
Most broad measures also rose Friday, but trading was extremely light again as many investors are on vacation.
“It was a modestly positive, quiet August Friday,” said Russ Labrasca, senior vice president at Principal Financial Securities of Dallas.
Long-term bond interest rates fell after the Commerce Department reported that construction of new homes and apartments slowed for a third straight month in July. The report was consistent with the latest readings on most other sectors of the economy, furthering expectations that Federal Reserve Board policymakers will not feel compelled to raise key lending rates next week.
As bond prices improved, the yield on the 30-year Treasury bond fell to 6.76% from 6.80% late Friday.
Advancing issues outnumbered decliners by a 2-1 margin on the New York Stock Exchange, where volume totaled 330.71 million shares as of 4 p.m. That is the 10th straight tally under 400 million and the seventh consecutive one under 350 million.
Traders said Friday’s expiration of options on individual stocks and on stock index futures had little effect on trading.
Most broad measures were higher, but the technology-laden Nasdaq composite index fell 1.04 points to 1,133.65 on a late round of selling in computer-related issues, which were pressured by a less-than-enthusiastic response to the industry’s latest earnings news.
After the close of trading Thursday, Hewlett-Packard had reported a 26% drop in third-quarter profit and warned that some profitability problems could continue. And networking equipment leader Cisco Systems reported a 78% gain in its fiscal-fourth-quarter earnings, exceeding most estimates but apparently not enough for some tastes.
Cisco shares surrendered early gains and finished down 1 5/8 at 56 1/8. But Hewlett-Packard shares, which slid 3 1/2 to 40 in after-hours trading on other markets after Thursday’s NYSE close, rebounded 1 7/8 to 41 7/8.
Among market highlights:
* Improving crude oil prices helped lift Exxon 1 5/8 to 82 3/8, Texaco 1 3/4 to 88, and Chevron 1 3/8 to 59.
* Bank stocks were higher, led by Chase Manhattan, which added 1 to 76 3/8, and Wachovia, up 7/8 to 46 1/2. Brokerage stocks also moved up. Merrill Lynch rose 1 3/8 to 64 1/8, and Salomon gained 3/4 to 45.
* Retailers, many of which reported better-than-expected earnings earlier in the week, extended recent gains.
Wal-Mart Stores gained for a third day, up 5/8 at 27 3/4; Dayton-Hudson advanced 5/8 to 35 5/8; and Nordstrom gained 13/16 to 38 1/16. May Department Stores, which has authorized the repurchase of as much as $600 million of its own stock, finished up 7/8 at 45.
Overseas, Tokyo’s Nikkei-225 stock average fell 0.6%, Frankfurt’s DAX index rose 0.1%, and London’s FTSE-100 rose 0.9% to a new high.
Market Roundup, D4
