Stocks End Volatile Week on Down Note
It’s down. It’s up. It’s down again.
The stock market that can’t seem to make up its mind turned course again Friday, sending the Dow index to a 60-point slide and the technology-heavy Nasdaq composite to a far sharper drop.
Analysts cited profit taking in the wake of Thursday’s 206-point Dow rally, another jump in oil prices and reduced profit forecasts from such companies as Costco Wholesale and Maytag.
The whipsaw trading wrapped up the second straight volatile week on Wall Street, dashing hopes among bullish investors that the previous day’s upswing might have marked the end of recent turbulence.
“Thursday’s blastoff felt like the beginning of something significant -- at least a 5% move to the upside,” said Doug Fabian, editor of the Successful Investing newsletter in Huntington Beach. “I’m surprised that we’re reeling again. It looks to me like the market wants to work itself lower.”
In heavy trading, the Dow Jones industrial average tumbled as much as 148 points intraday before buyers stepped in during the final hour. The Dow ended with a loss of 60.89 points, or 0.6%, to 10,157.71, and the broader Standard & Poor’s 500 slid 7.83 points, or 0.7%, to 1,152.12.
Nasdaq plummeted 30.22 points, or 1.5%, to 1,932.19, with tech stocks such as Yahoo pacing the decline after rallying the day before.
Falling shares outnumbered gainers by 3 to 2 on the New York Stock Exchange and by 2 to 1 on Nasdaq.
For the week, the major indexes notched gains, however: The Dow was up 0.7%, the S&P; 500 added 0.8% and Nasdaq climbed 1.3%.
Friday’s bond market was mixed, with the yield on the benchmark 10-year Treasury note easing to 4.25% from 4.3% on Thursday. Bond yields decline as their prices rise, and so Friday’s decline on the 10-year note probably reflected money being shifted from stocks to bonds.
“There’s a short-term, nervous trader’s mentality,” said Sam Stovall, chief investment strategist at Standard & Poor’s in new York.
Anxiety spiked briefly at midday after the Wall Street Journal’s online edition reported that North Korea might be planning a nuclear weapon test, traders said, but the selling soon stabilized.
Oil prices back above $55 a barrel also unnerved investors, reminding them that high energy costs continued to cloud the U.S. economic outlook. Crude rose $1.19 to $55.39 a barrel.
The stock market’s volatility could continue next week, Stovall said, noting that a series of economic and earnings reports would be closely watched.
Data on U.S. home sales will be issued Monday, followed Tuesday by an update on the Conference Board’s consumer confidence index and Thursday by calculations of first-quarter gross domestic product.
On the earnings front, a range of companies will issue results, including steelmaker Carpenter Technology, household products maker Colgate-Palmolive and Florida utility FPL Group. Gum maker Wm. Wrigley Jr. “also should give investors something to chew on,” Stovall said.
Among Friday’s market highlights:
* Costco sagged $3.85 to $40.17 after warning that weaker-than-expected gasoline sales would crimp revenue in the current period.
* Yahoo shed $1 to $34.87 after CIBC World Markets downgraded its shares to a neutral rating. Elsewhere in tech, chip maker Xilinx lost $2.37 to $27.07 and flash-memory card maker SanDisk sank $2.56 to $25.32, both on disappointing profits.
Web portal Google bucked the downtrend, climbing $11.59 to $215.81 after exceeding profit expectations late Thursday.
* Weak earnings hurt appliance maker Maytag, which dived $4.21 to $10.89; photo equipment maker Eastman Kodak, which slipped $2.85 to $27.55; and auto parts maker Lear, which fell $3.51 to $36.77.
* Strong profits boosted education company DeVry, which rose $3.44 to $23.20, and Hershey Foods, which gained $2.37 to $63.19.
