Stocks Move Little, but Bond Yields Jump

From Times Staff and Wire Reports

U.S. stock prices were little changed on Friday in a half-day session that is always one of the slowest of the year.

Treasury bond yields jumped as some traders bet that the economy’s pace may not slow soon, raising concerns about tighter credit in 2004.

Investors who thought stocks might get a lift from news of President Bush’s surprise visit to Iraq on Thanksgiving Day may have been disappointed with the response. The Dow Jones industrial average added just 2.89 points to 9,782.46.

The Nasdaq composite index rose 6.95 points, or 0.4%, to 1,960.26, while the Standard & Poor’s 500 dipped 0.25 point to 1,058.20.


Still, winners topped losers by 3 to 2 on the New York Stock Exchange and on Nasdaq.

“People are making sure portfolios are positioned for more good economic news early next week,” said Frederic Dickson, director of retail research at D.A. Davidson & Co. in Portland, Ore.

And though the Dow’s gain was meager, it was the fifth straight advance. For the week, the Dow rose 1.6%, Nasdaq gained 3.5% and the S&P; 500 was up 2.2%.

It was “Kids’ Day” at the NYSE on Friday, where cartoon character SpongeBob SquarePants rang the closing bell.


Equity investors have been cheered in recent days by more signs that the economy is on a roll. But those same signs helped push up bond yields on Friday. The 10-year Treasury note rose to 4.33% from 4.25% Wednesday.

The two-year T-note, which is particularly sensitive to expectations of changes in the Federal Reserve’s key short-term rate, rose to 2.05% from 1.99% on Wednesday. The yield now is the highest in almost one year.

“The bond market is preparing itself for the Fed” to begin warning of tighter credit, David Brownlee, who helps manage $7 billion at N.L. Capital Management in Montpelier, Vt., told Bloomberg News. Yet most economists believe the Fed will maintain its key rate at 1% well into the first half of next year.

Among Friday’s highlights:

* Technology stock trading was dominated by a report showing that global sales of semiconductors in October had their strongest month-on-month growth since March 2002, on the back of strong demand for a wide range of electronics products, according to a monthly industry survey.

Chip equipment maker Applied Materials rose 50 cents to $24.24, KLA Tencor gained $1.13 to $58.53, National Semiconductor jumped $1 to $44.59, and International Rectifier was up 94 cents to $54.62.

* Some retailers gained ahead of the first big shopping weekend of the holiday season. Kmart jumped $1.44 to $30.44, Best Buy rose 90 cents to $62, and Coach added 76 cents to $39.84. Among Internet retailers, rallied $1.01 to $53.97.

* Schering-Plough topped the NYSE’s most-active list on news that its chief executive bought $4.68 million of company stock. The firm’s shares rose 67 cents to $16.05.


* Gold mining stocks continued to climb, though the U.S. gold futures market was closed Friday for an extended holiday. Gold briefly topped $400 an ounce on Wednesday for the first time since 1996. Newmont Mining added 80 cents to $48.14, Ashanti Gold was up 43 cents to $13.61, and Agnico Eagle rose 29 cents to $11.85.

* Some indexes of smaller stocks rose to record highs, including the S&P; 600 index, which edged up 0.50 point to 265.92. It’s up 35.3% this year, double the blue-chip Dow’s gain.


Market Roundup, C4-5