Stocks Mixed on Weak Volume; Yields Decline
Stocks ended mixed Friday after a fitful session ahead of the long holiday weekend.
Meanwhile, long-term Treasury bond yields slid to their lowest levels since early May on new reports suggesting the economy may be slowing.
On Wall Street the Nasdaq composite index ended with a tiny loss, off 0.24 point to 3,205.11, after trading as low as 3,150 and as high as 3,256.
The Dow industrials also eased, falling 24.68 points to 10,299.24.
But the Russell 2,000 index of smaller stocks rose 1.20 points to 457.37.
Winners held a modest edge over losers on the New York Stock Exchange, though losers dominated on Nasdaq.
Weak trading volume--1.07 billion shares on Nasdaq--indicated that many investors took off early for the holiday.
Still, some analysts were encouraged that buyers bid up battered technology stocks toward the end of the session.
Cisco Systems, which fell as low as $52.63, closed up 44 cents at $54.94. Qualcomm, which fell as low as $62.38, ended at $66.06, down $2.94.
For the week, the Nasdaq index lost 185.29 points, or 5.5%, though it ended Friday above the six-month low of 3,164.55 reached Tuesday. Still, the index is 36.5% below its record high reached March 10.
The Dow fell 3.1% for the week, ending Friday at its lowest level since March 15.
In theory, at least, many investors remain unwilling to bid up stocks because of fears that the Federal Reserve will continue to raise short-term interest rates to slow the economy.
But on Friday, there was some evidence the economy is beginning to power down.
The government said orders to U.S. factories for big-ticket manufactured goods fell 6.4% in April, its biggest plunge since December 1991. The decline was mostly attributed to a steep slump in orders for electronics and electrical equipment.
Also Friday, the government reported that Americans’ spending rose in April at its slowest pace in nine months.
The Treasury bond market seemed to like those numbers: The yield on the two-year T-note eased to 6.68% from 6.73% on Thursday. The 10-year T-note yield ended at 6.33%, down from 6.40% and the lowest since May 2.
But the stock market may have other worries if business activity is in fact beginning to slow: The strength of future corporate earnings may be called into question.
Some experts doubt that there’s much of a slowdown in progress. “People are still earning a lot of money and, as good Americans, will continue to spend it,” said Zane Brown, director of fixed income at Lord, Abbett & Co.
Among Friday’s highlights:
* In the tech sector, Intel rose $2.38 to $117.56, Oracle added 56 cents to $67 and Advanced Micro Devices gained $3.38 to $74.
But Texas Instruments lost $3 to $67, Applied Materials fell $2.38 to $74.31 and Yahoo eased $2.94 to $112.06, lowest since December.
* Buyers were more active in the telecom sector. Lucent Technologies surged $3.25 to $55.75, EchoStar rose $2.56 to $38.69 and Equant gained $4.44 to $40.44.
* In the Internet sector, Quepasa.com rose 19 cents to $1.75 after the company said it will consider strategic alternatives, including putting itself up for sale.
* Food stocks, which have been attracting more interest in recent weeks in part because of renewed takeover activity, were broadly higher. Heinz rose $1.56 to $41.81, Hershey gained $1.75 to $55 and Keebler Foods rose $1 to $36.63.
Grocery store stocks also gained. Safeway jumped $1.19 to $47.31 and Kroger was up $1.38 to $20.75.
* Electronics retailers were weak across the board. Circuit City tumbled $5 to $50.69 and Best Buy slid $7.56 to $62.38.
* Brokerage stocks remained weak on earnings worries. Merrill Lynch fell $3.25 to $91.06 and Goldman Sachs dived $3.19 to $69.81.
* Deere tumbled $3.25 to $44.69. Despite a strong recent earnings report, brokerage Morgan Stanley Dean Witter downgraded the stock to “neutral” from “outperform” in part on concerns about rising interest rates and their effect on the farm economy.
* China-related stocks continued to slide in the wake of the House’s passage of a bill opening up normal trade relations with China. Many Chinese firms may be hurt by greater competition. Yanzhou Coal fell 88 cents to $9.63 and Chinadotcom lost $1.50 to $23.
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Market Roundup, C6-7
