Indexes Slip but Stay Ahead for the Week
Stocks were mixed Friday with major indexes making moderate pullbacks as investors cashed in gains from the previous session’s big rally, concerned that the market might have advanced too quickly. The indexes still managed to end the week with a solid advance.
Analysts said investors remained confident about a strong economic rebound but were being cautious for now. Trading also was choppy because of quadruple-witching day, the quarterly expiration of index futures and options as well as individual stock futures and options.
“Investors more or less are taking a pause after a pretty nice run-up,” said Richard J. Nash, chief market strategist at Victory Capital Management. “With the lack of any real economic data today, folks might just be booking some profits into the weekend.”
The Dow Jones industrial average closed down 14.31 points, or 0.2%, at 9,644.82, having gained 113 points in the previous session to its first close above 9,600 since June 18, 2002. The Nasdaq composite index fell 3.85 points, or 0.2%, to 1,905.70, after climbing to its highest close in 18 months Thursday. The Standard & Poor’s 500 index declined 3.28 points, or 0.3%, to 1,036.30.
Though the major gauges were lower, the broad market advanced, with winners leading losers by 9 to 7 on the New York Stock Exchange and by 16 to 15 on Nasdaq. Trading was active.
For the week, the Dow rose 1.8%, the Nasdaq gained 2.7% and the S&P; advanced 1.7%. The Dow has gained in six of the last seven weeks; the Nasdaq and S&P; have posted wins in five of the last six weeks.
Stocks have surged since mid-March as investors grow increasingly optimistic about the economic outlook. Some analysts say the recent data bodes well for the upcoming third-quarter season.
“Overall, the market remains very healthy,” said Michael Sheldon, chief market strategist at Spencer Clarke. “Investors continue to buy into the market on pullbacks. The biggest risk we face is valuation, with many stocks reaching levels that already incorporate a significant rebound in the economy.”
In other trading, gasoline futures in New York fell to a four-month low after Hurricane Isabel failed to disrupt oil refining along the East Coast. Gasoline for October delivery fell 1.47 cents to 78.7 cents a gallon in New York, the lowest closing price for a front-month contract since 77.96 cents on May 7.
Concern over the hurricane “was kind of overblown,” said Peter Donovan, a broker with Vantage Trading Inc. in New York. “As far as we know there was really no major damage.”
Oil futures, meanwhile, fell for the sixth day in the last seven, dropping 14 cents to $27.03 a barrel in New York.
Gold rose $5.20 to $381.80 an ounce in New York, reaching its highest closing price in almost seven years as the dollar fell against the euro and yen, making the dollar-priced metal cheaper for buyers in Europe and Japan.
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Market Roundup, C4-5
