Blue-Chip Stocks Make Gains as Nasdaq Declines
Stocks were mixed Friday as investors awaited next week’s meeting of the Federal Reserve, but major blue-chip indexes still managed to notch their fourth consecutive weekly gains.
The Dow Jones industrial average inched up 21.22 points, or 0.2%, to 9,200.75, and the Standard & Poor’s 500 index added a fraction of a point, or 0.1%, to 995.69. But losers edged out winners on the New York Stock Exchange.
The technology-laden Nasdaq composite index gave up 3.92 points, or 0.2%, to 1,644.72, although winners and losers were about even.
Trading was heavy, in part because Friday was a “quadruple-witching” session featuring the expiration of stock index futures, stock index options, equity options and single stock futures.
For the week, the Dow gained 0.9% and the S&P; 500 rose 0.7%. It was the fourth straight winning week for the two benchmarks and the ninth in the last 10 for the S&P; 500. Nasdaq rose 1.1% for the week.
On a day of little economic news, traders attributed the market’s gains to buying by fund managers afraid of underperforming key indexes as the end of the quarter approaches.
Blue-chip issues were buoyed after General Electric affirmed its earnings outlook for the second quarter and full year. The news surprised some analysts, who had expected the diversified company to lower the range of its earnings guidance. Its shares ended up 15 cents at $30.01.
Keeping the market on edge was news that the U.S. Embassy in Kenya was closed because of a “serious terror threat,” an embassy spokesman said. U.S. intelligence reports indicated there was a threat of an attack against American interests there, defense officials said.
Treasury yields continued their recent rebound as some investors scaled back their expectations for a Fed rate cut, amid stronger economic data. A half-point reduction in the central bank’s key rate, currently 1.25%, had seemed likely until this week; now, more investors expect a quarter-point cut.
The yield on the 10-year Treasury note rose to 3.36% from Thursday’s close of 3.34%, wrapping up its biggest weekly jump since mid-March. It was at a 45-year low of 3.11% a week ago.
The dollar rose against the euro as it finished its strongest weekly performance against the European currency since March.
In other highlights:
* Gains in industrial stocks indicated that some investors are shifting assets from computer-related shares, which have led the recent rally. On Friday, many tech leaders were lower, including Cisco Systems, off 63 cents at $17.93, and Intel, down 45 cents to $20.67.
* Cognos, Canada’s largest software maker, declined $2.24 to $27.66. The company said it expects to earn less than what analysts forecast this quarter because the rising value of the Canadian dollar has boosted expenses.
* Nautica Enterprises jumped $1.37 to $13.36 after the men’s apparel maker said it was in talks to sell itself.
* Bed Bath & Beyond slid $1.42 to $39.15. The top U.S. housewares retailer bought closely held Christmas Tree Shops for about $200 million in cash.
Market Roundup, C6-7
