Dollar’s Bounce Back Eases Stocks’ Decline
U.S. stocks fell again Friday, capping a miserable week but closing well above session lows as the dollar’s recovery helped ease the selling pressure that briefly drove the Dow into the correction zone.
The Dow industrial average dipped 39.26 points, or 0.4%, to 10,279.33; the Nasdaq composite slid 9.42 points, or 0.3%, to 2,740.41.
Though the Dow crawled out of official “correction” territory, its loss--on top of drops of more than 200 points Tuesday and Thursday and a lesser decline Wednesday--added up to a decline of 524.30 points, or 4.9%, for the week. It was the fifth straight weekly decline.
The Nasdaq index lost 4.5% for the week, while the Standard & Poor’s 500 sagged 4.3%.
The beaten-down dollar edged up to 104.17 yen from 103.95 Thursday after a week of nearly relentless gains for the yen. Traders were hoping a weekend meeting of officials from the Group of Seven industrial nations could lead to a concerted effort to weaken the yen.
Wall Street fears a sinking dollar will trigger foreigners’ sales of U.S. securities.
Also helping stocks Friday: The yield on the benchmark 30-year Treasury bond slipped to 5.96% from 5.99% Thursday.
The Dow’s late recovery was paced by its two technology components, which were among Thursday’s main losers: IBM rebounded $3 to $125 and Hewlett-Packard bounced back $2.25 to $96.63.
Before rallying, the Dow dived to a session low of 10,187, or a 10% decline from its Aug. 25 record high. On Wall Street, a drop of 10% or more from a recent high is considered a correction.
Nasdaq’s late turnaround was led by Internet issues and other tech stocks. Yahoo surged $9.56 to $183.31 after launching an online guide for Web users in China.
Some analysts said Thursday’s tech blood bath--triggered when Microsoft President Steve Ballmer called the sector overvalued--represented a buying opportunity.
“Smart buyers are getting some cheap securities going into the weekend,” said analyst Doug Myers of Wachovia Securities.
Gains in advertising, bank and tech issues helped trim the S&P; 500’s loss. Ad-marketing conglomerate Omnicom rallied $3.25 to $75.88 after a four-day slide.
Still, decliners beat advancers 18 to 11 as 869 million shares changed hands on the Big Board.
Among the highlights:
* Major techs were mixed. Microsoft eased 25 cents to $90.94 and Intel slid $1.83 to $75.67, but Apple rose $1.63 to $64.94 and Sun Microsystems added 56 cents to $90.19.
* NetZero (ticker symbol: NZRO), which offers free Internet access with inescapable ads, vaulted $13.13 to $29.13 in its debut, making the Westlake Village firm worth $3 billion.
In other debuts, Net software developer Alteon WebSystems (ATON) exploded $55.94 to $74.94, Keynote Systems (KEYN) surged $13.25 to $27.25 and Bluestone Software (BLSW) rose $3.75 to $18.75.
* Allstate plunged $3.50 to $28.25. It expects third-quarter operating earnings of 50 cents to 55 cents a share, well below estimates, in part because of hurricane-related claims.
Market Roundup, C4
