Blue chip stocks ended slightly higher Friday and a key market gauge notched a 17-month high. But tech stocks ended flat as investors drew back after large gains in October.
Upbeat earnings and forecasts from companies such as health insurer Cigna underpinned the market, but a weak report on consumer spending gave investors pause.
As the major market gauges recorded solid gains for the month and approached the mid-October high-water mark for the current rally, investors backed off a bit. However, the Standard & Poor's 500 index, with a gain of 3.77 points, or 0.4%, to 1,050.71, managed to close at its highest level since May 31, 2002.
The Dow Jones industrial average closed up 14.51 points, or 0.2%, at 9,801.12 -- just shy of its recent high of 9,812.98. The technology-laden Nasdaq composite index, which inched within 8 points of its recent peak, ended the day down less than point at 1,932.21.
Winners led losers by about 5 to 4 on the New York Stock Exchange, while declining stocks held a slight edge on Nasdaq. Trading was active.
Friday marked the first time the Dow rose every day in a week since June. The Dow rose 2.3% for the week and climbed 5.7% in October -- its largest monthly gain since April. This was the Dow's seventh month of gains in the last eight.
Nasdaq rose 3.6% for the week and jumped 8.1% for the month, ending October with its largest monthly gain since May. The S&P; 500 gained 2.1% for the week and 5.5% for the month.
Smaller stocks posted even bigger gains than large companies did. The S&P; small-cap 600 index, whose members have an average market value of $700 million, rose 8.6% in October. The index closed at 256.41 Friday, within 2 points of its record closing high set in 2002.
On Friday, a closely watched economic report showed that business activity in the Midwest expanded in October for a sixth straight month and at a faster pace, although a touch slower than Wall Street expected.
Meanwhile, the University of Michigan said its index of U.S. consumer sentiment rose to 89.6 in October from 87.7 in September, but a Commerce Department report showed consumer spending cooled in September for the first time since February as a boost from tax cuts faded.
The lukewarm economic news took some of the shine off Thursday's report that the U.S. economy expanded at a 7.2% annual rate in the third quarter.
Treasury yields dipped amid belief that such a level of growth is unsustainable. The yield on the benchmark 10-year T-note fell to 4.29% from Thursday's close of 4.34%.
"There is still some disbelief out there about the strength of the economy going forward, which is why Treasuries are looking like a good place to be right now," said Kenneth Anderson, a fixed-income manager at Evergreen Investments.
In other highlights:
* The stocks of two newly public firms rose from their offering prices. Overnite gained $3.16 to $22.16. The trucking company, spun off from Union Pacific, raised $475 million in its $19-a-share IPO. First Marblehead jumped $6.15 to $22.15. The student loan firm raised $200 million in its $16-a-share IPO.
* Shares of Cigna surged $9.08, or 19%, to $57.05 after it raised its 2003 profit outlook and set a 2004 view higher than Wall Street had expected, reflecting the company's effort to keep a lid on medical costs. Cigna also swung to a profit for the third quarter from a year-ago loss.
* Among the Dow's top percentage gainers were SBC Communications, up 50 cents to $23.98, and Johnson & Johnson, up 85 cents to $50.33.