Stocks Gain as Rate Fears Ease

Most stocks ended the week on an upbeat note Friday, as another Federal Reserve official attempted to downplay concerns about a central bank credit-tightening move.

The Dow Jones industrial average climbed 54.51 points, or 0.5%, to 10,451.97, and the Standard & Poor’s 500 index added 5.77 points, or 0.5%, to 1,134.61.

The technology-dominated Nasdaq composite index lost ground, falling 6.43 points, or 0.3%, to 1,995.74.

But the broad market’s breadth was positive: Winners topped losers by more than 2 to 1 on the New York Stock Exchange and by a slight margin on Nasdaq.

Some weaker-than-expected economic reports Friday helped to push bond yields down and lessened concerns that the Fed might be on the verge of raising interest rates.

Those fears had surged earlier in the week, amid strong economic data and a surprisingly large jump in the consumer price index in March.

The yield on the 10-year Treasury note fell to 4.34% Friday from the four-month high of 4.40% reached Thursday. Still, the yield was up from 4.19% a week ago.

Bonds also were calmed by comments from Alfred Broaddus, president of the Federal Reserve Bank of Richmond. In a speech, he said the Fed needed “at least a little more confirmation of the apparent strength in the economy” before addressing interest rates.

On Thursday, Fed Gov. Ben Bernanke also had sought to dispel fears of an imminent interest rate increase.

But many market pros believe the Fed will be forced to tighten credit by year’s end.

“The economy will continue to ramp up through the rest of the year,” Charles King, a money manager at Scudder Private Investment Counsel in Philadelphia, told Bloomberg News. “You’ll see a Fed rate hike in the fourth quarter.”

Many investors also believe that stocks could overcome higher interest rates if corporate earnings continue to grow.

Even so, the market struggled for much of this week despite generally robust first-quarter earnings reports.

The Dow added 0.1% for the week, but the S&P; 500 was down 0.4%, the Nasdaq index sank 2.8%, and the Russell 2,000 small-stock index dropped 2.4%.

Concerns about the level of some tech companies’ shares relative to underlying earnings weighed on the sector Friday. IBM fell $1.69 to $92.28, Intel eased 21 cents to $26.45, and Cisco Systems lost 34 cents to $22.48.

DoubleClick tumbled $2.95 to $8.99 after the Internet advertising firm reported quarterly sales below expectations.

Nokia slumped $1.44 to $14.61 after the cellphone giant issued a second earnings warning in 10 days, saying its second-quarter profit would fall short of expectations. Rival Motorola lost 61 cents to $16.58.

Among Friday’s market highlights:

* Some medical device makers rallied on optimism about their growth prospects. Stryker rose $4.06 to $99.66, and St. Jude Medical was up $2.12 to $76.27.

* Commodity-related shares were higher. Georgia-Pacific gained $1.04 to $36.45, and Alcoa rose 99 cents to $33.99.

* Bank stocks rebounded after falling on interest rate concerns for much of the week. J.P. Morgan Chase added 49 cents to $39.26, Comerica gained $1.48 to $52.50, and City National jumped $1.34 to $60.49.

* Gold regained some lost ground, adding $3.30 to $401 an ounce in New York.

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Market Roundup, C4