Dow Stays Below 10,000 Despite Gain
Wall Street ended a lousy week with a blip upward Friday, but the modest advance only underscored how fragile and fractious the stock market has become.
The gain wasn’t enough to bring the Dow Jones industrials back above 10,000. On Thursday, the blue-chip average fell below that mark for the first time since April 9. It was down 1.7% after a spate of bad economic and corporate news.
An unexpectedly strong report on factory orders sent stocks surging early in the session, but the good news was quickly overshadowed by investors’ long-standing concerns about the lackluster economy and disappointing company profits.
“There is no news here today that would say we’re about to reverse this thing on a permanent basis,” said Bill Barker, investment strategy consultant at Dain Rauscher in Dallas.
The Dow, up more than 100 points in the early going, closed up 30.17 points, or 0.3%, at 9,949.75. For the week, it closed down 473.42 points, or 4.5%.
Broader stock indexes also were higher. The Nasdaq composite index rose 13.75 points, or 0.8%, to 1,805.43, and the Standard & Poor’s 500 index edged up 4.55 points, or 0.4%, to 1,133.58.
But for the week, the Nasdaq slid 111.37 points, or 5.8%, and the S&P; 500 sank 51.35 points, or 4.3%. It was the biggest weekly loss for U.S. stocks since March.
Friday’s listless performance followed four straight days of declines that sent the Dow down more than 500 points.
The fluctuations during Friday’s trading were “just vacillation,” said Jon Brorson, director of equities at Northern Trust in Chicago. “Investors are in an ‘I don’t want to shoot until I see the whites of their eyes’ mode.”
Concerned about the market’s previous sell-offs, investors have been reluctant to buy because they sense no immediate possibility for a recovery in share prices. They’re also waiting in vain for a solid string of news from the government or companies that the economy might be ready for a turnaround.
“We need tangible evidence of a bottom to restore confidence,” Brorson said.
The Commerce Department report Friday that factory orders rose 0.1% gave investors a reason to snap up bargains, but experts said the uptick was little more than a temporary burst of buying.
“It’s very hard to be confident and make any bold statements here about economic recovery when the people actually running the companies have no idea how business is going to be a few months from now,” said Charles White, president and portfolio manager at Avatar Associates in New York.
Among Dow component stocks, Alcoa rose 63 cents to $38.12 and J.P. Morgan was up 16 cents to $39.40. IBM dropped 41 cents to $99.95, and Hewlett-Packard fell 19 cents to $23.21.
Novellus Systems dropped $2.42 to $44.31 on Nasdaq after the company said third-quarter orders will be at the low end of expectations.
Overall, August was a bad month for investors. The Dow hit its high point Aug. 2, closing at 10,551.18, but ended the month down 5.3%.
On Friday, winners outpaced losers by 4 to 3 on the New York Stock Exchange and by 5 to 4 on Nasdaq. Trading volume was light ahead of the holiday weekend. U.S. securities markets will be closed Monday for Labor Day.
Overseas, Japan’s stock market continued to suffer. The Nikkei 225 stock average lost 2.1%, falling 224.94 points to 10,713.51.
Market Roundup, C4
