Stocks Up in Session but Down for Week
A burst of late-day buying lifted Wall Street modestly higher Friday despite a lackluster retail sales report and disappointing sales of new software licenses by Oracle. Still, the market ended with a loss for the week, ending a four-week winning streak.
Analysts said investors decided to take advantage of some bargains after the Dow Jones industrials slid almost 79 points early in the day.
“Generally speaking, people are optimistic, but we’re now at valuations that are appropriate as long as the economic and profit picture continue to improve as they have been,” said Susan L. Malley, chief investment officer for Malley Associates Capital Management.
“As we move into the earnings pre-announcement season, people are standing pat in case there are any bad surprises,” she said.
The Dow finished up 11.79 points, or 0.1%, at 9,471.55; the tech-laden Nasdaq composite index rose 8.94 points, or 0.5%, to 1,855.03; and the Standard & Poor’s 500 index rose 2.21 points, or 0.2%, to 1,018.63.
Winners led losers by 4 to 3 on the New York Stock Exchange and by 9 to 7 on Nasdaq. Trading volume was weak.
For the week, the Dow fell 0.3%, as did the broader S&P; 500, while Nasdaq declined 0.2%. Nasdaq and the S&P; 500 ended a four-week winning streak, while the Dow fell after five weeks of gains.
Stocks were sluggish for most of the session but edged higher late in the day. A report Friday morning on retail sales for August came in below analysts’ expectations, contributing to pessimism about the economy’s prospects for a turnaround.
But traders had other good news about the economy to focus on. The Wall Street Journal reported Friday that economists polled in a monthly survey predicted the economy would grow in the second half of the year at the fastest rate in four years.
Stocks were choppy this week as investors commemorated the anniversary of the Sept. 11 terror attacks and wondered whether the market’s six-month rally may be waning. Analysts say the earnings warning season, which begins in earnest next week, will probably give investors guidance on the strength of the economic recovery.
“The market is now getting focused on every single one of the economic numbers,” said Janet Engels, director of the private client research group at RBC Dain Rauscher. “The equity markets have moved up, and therefore the market wants to see that things are clearly improving on both the consumer and business side.”
In other trading, oil prices closed near four-month lows as the latest Atlantic storm, Hurricane Isabel, appeared likely to spare the sprawling oil production facilities in the Gulf of Mexico next week. Crude fell 55 cents to $28.27 in New York trading.
Bond yields slipped on the tepid economic news, with the yield on the benchmark 10-year Treasury note falling to 4.25% from Thursday’s close of 4.32%.
In other highlights:
* Qualcomm rose $1.82 to $42.82 after Merrill Lynch raised the telecom company’s stock rating to “buy” from “neutral.”
* Microsoft gained 50 cents to $28.34 after the software company said it was doubling its annual dividend to 16 cents a share.
* Oracle dropped 43 cents to $12.55 after the business software maker reported quarterly profit and revenue that met analysts’ expectations; however, sales of new software licenses fell by 6%.
* Janus Capital Group fell $1.38 to $14.50 after Merrill Lynch lowered the mutual fund firm’s rating to “neutral” from “buy,” citing uncertainty after state and federal regulators announced an investigation into Janus and other firms for potentially improper trading.
* Alcan rose $3.82, or 10%, to $38.47. It won the backing of France’s Pechiney for a takeover that would create the world’s largest aluminum company.
Market Roundup, C4-5
