Dow Notches 7th Gaining Week
Blue-chip stocks notched their seventh straight week of gains Friday -- the longest streak in more than four years -- though some investors couldn’t resist cashing in recent profits late in the day.
A pullback was somewhat expected after a two-day surge pushed stocks to their highest level in months, analysts said. Lighter trading in advance of the Thanksgiving holiday also contributed to a choppy session.
“We’re having a bit of pause after [Thursday’s] big rally,” said Ed Peters, investment officer at PanAgora Asset Management. “With the advance being so quick, people are reassessing.”
The Dow industrials fell 40.31 points, or 0.5%, to close at 8,804.84, after a two-day gain of 370 points. Thursday, the blue-chip index closed at its highest level since Aug. 26.
Broader market indexes finished mixed Friday, although the overall market was positive, with winners leading losers by slim margins on the New York Stock Exchange and Nasdaq.
The Nasdaq composite index inched up 1.19 points, or 0.1%, to 1,468.74, the highest since June 19. The Standard & Poor’s 500 index declined 3.21 points, or 0.3%, to 930.55.
For the week, the Dow gained 2.6% to post its seventh winning week in a row, a feat not seen since the period ended March 20, 1998. The Nasdaq climbed 4.1% and the S&P; 500 rose 2.3%, their sixth week of gains in seven weeks.
Investors have been cheered in recent days by some upbeat economic reports. Just as important, some analysts say, is that institutional investors know that the stock market is traditionally strong in December -- which is making them afraid of missing out on a continuing rally.
“There’s a real performance anxiety out there right now for people to get invested,” said Philip S. Dow, managing director of equity strategy at Dain Rauscher Wessels.
But analysts caution that the market remains vulnerable to trigger-finger profit-taking as well as concerns about terrorism and a possible war with Iraq.
The tech sector, which rallied sharply on Wednesday and Thursday, was held back Friday after computer networking firm Brocade Communications Systems cut its revenue outlook, slashed jobs and said its chief operating officer will leave.
Still, the news from battered tech companies has been improving lately. Hewlett-Packard surged 12.7% on Thursday after the company reported a surprisingly strong quarterly profit.
HP shares added 16 cents to $19.15 on Friday. Elsewhere in tech, Oracle gained 12 cents to $11.58 and Palm rose 57 cents to $16.72.
Optimism that the economy will continue to improve has caused more investors to flee Treasury bonds in recent weeks, in favor of stocks.
The five-year Treasury note yield climbed Friday to its highest level since August, rising to 3.24% from Thursday’s 3.21%.
“We are entering a bear market for Treasuries,” John Roberts, head of government bond trading at Barclays Capital Inc., told Bloomberg News. “Moves into corporate bonds and stocks are accelerating.”
Among Friday’s highlights:
* Brocade fell $2, or 27%, to $5.28, on its warning. Shares of other data storage-related companies also slid. QLogic was off $1.24 to $43.26 and Emulex eased 74 cents to $24.67.
* Salomon Smith Barney cut its ratings on software companies Siebel Systems and PeopleSoft, saying software-related firms probably will give bleak forecasts in coming months. Still, Siebel shares closed up 8 cents at $8.75. PeopleSoft shares dropped $1.04 to $19.99.
* ConocoPhillips dropped $1.39 to $48.55. The third-largest U.S. oil company said it would produce less oil and natural gas next year and has targeted asset sales of as much as $4 billion as it seeks to trim debt and improve returns. Exxon Mobil, the biggest publicly traded oil company, fell 64 cents to $34.22.
* Cosi, a New York-based restaurant chain known for its sandwiches, rose 60 cents, or 8.6%, to $7.60, on its first day of public trading.
