Stocks Edge Higher in Short, Quiet Session
Stocks finished higher on Wall Street on Friday as investors picked up bargains in an abbreviated post-Christmas session. The Dow Jones industrial average and the Standard & Poor’s 500 index advanced for a fifth straight week.
Despite the overall market gains, stocks of companies that process or sell meat took another hit on news of the nation’s first case of “mad cow” disease. And cattle futures fell again on worries of lower demand for beef.
The Dow gained 19.48 points to 10,324.67, the S&P; 500 advanced 1.85 points to 1,095.89, and the tech-heavy Nasdaq composite index added 3.91 points at 1,973.14. All three indexes advanced about 0.2% for the day.
Rising stocks outnumbered decliners by 5 to 3 on the New York Stock Exchange. Trading was slow as U.S. markets closed three hours early after being shuttered all day Thursday for Christmas. It was the lightest volume on the Big Board since Dec. 24, 1998, according to Bloomberg News.
Wall Street will resume its regular trading schedule Monday, although markets will be closed Thursday for New Year’s Day.
For the week, the Dow finished up 0.5%, the S&P; 500 rose 0.7% and Nasdaq advanced 1.1%. The S&P; 500 is on its longest weekly winning streak since May. Year to date, the Dow is up 23.8%; the S&P; 500, 24.6%; and Nasdaq, 47.7%.
Confirmation that a cow in Washington state had the deadly “mad cow” disease continued to depress the stocks in the meat industry, which suffered widespread losses Wednesday. But restaurant shares staged a bit of a recovery.
Jack Caffrey, an equity strategist for J.P. Morgan Private Bank, said investors were making a distinction between processors, which may face higher testing and distribution costs for beef in the near term, and restaurants, which typically have diversified menus.
Shares of Tyson Foods, the world’s largest meat processor, fell 31 cents to $12.59 after Morgan Stanley cut its investment rating to “equal weight” from “overweight” and cut its profit outlook. Tyson’s shares have dropped 10% since Wednesday. Among other food companies, ConAgra Foods lost 12 cents to $26.01, while Smithfield Foods was down 24 cents at $21.91.
Restaurant shares edged higher after sliding this week on fears that consumers would shy away from beef. McDonald’s, a Dow component, gained 13 cents to $24.09. Wendy’s International added 20 cents to $37.99. Outback Steakhouse rose 32 cents to $42.72, and Rare Hospitality International, owner of LongHorn Steakhouse restaurants, rose 31 cents to $24.
Companies that specialize in meat purification processes gained. Bio-Rad Laboratories of Hercules, Calif., the market-leading provider of tests for “mad cow” disease worldwide, added $2.33, or nearly 4%, to $62.15. Its shares surged 20% on Wednesday.
Cattle futures plunged the maximum allowed by the Chicago Mercantile Exchange after Japan joined South Korea and Mexico in banning U.S. beef.
Cattle for February delivery fell 3 cents to 86.175 cents a pound. The contract also fell the exchange limit Wednesday.
The daily price-change limit was increased to 3 cents from 1.5 cents and will rise to 5 cents on Monday. Such limits are imposed to allow for traders to buy or sell in an “orderly fashion” in response to new information.
Treasury prices rose as heightened concern over terrorist activity pushed investors to the haven of government debt. Comments by Dallas Federal Reserve President Robert McTeer that inflation was “very dormant” also buoyed bonds. The yield on the benchmark 10-year Treasury note, which moves opposite of its price, fell to 4.15% from Wednesday’s close of 4.19%.
In other highlights Friday:
* Investors responded to reports from retailers that Christmas sales were up modestly. Wal-Mart Stores rose 8 cents to $52.52 after the world’s largest retailer said last-minute holiday sales were good, although not good enough to lift same-store sales growth above the low end of its projected 3%-to-5% range. Sharper Image rose $2.42 to $32.39 after the San Francisco-based specialty retailer raised its fourth-quarter earnings estimates. Amazon.com reported its best holiday season ever, and its shares advanced 15 cents to $53.47.
* Overseas, Japan’s Nikkei stock average rose 0.5% to close at 10,417.41. Markets in Britain, Germany and France were closed.
Market Roundup, C4-5
