Stocks End Session Mixed
Wall Street gave up early gains and closed mostly lower Friday after oil prices topped $75 a barrel for the first time. The Dow Jones industrial average reached another six-year high on strong earnings from 3M, and the major indexes managed gains for the week.
Investors’ inflation fears intensified as oil prices climbed to a new record, rising $1.48 to settle at $75.17 a barrel on the New York Mercantile Exchange.
The continued gains in oil and gold prices and in bond yields are keeping inflation worries at the forefront, said Ken Tower, chief market strategist for Schwab’s CyberTrader.
Evidence of strong economic growth in next week’s reports would renew the debate over when the Federal Reserve might halt its rate tightening.
“The Fed is going to have a hard time stopping their increases if the economy seems to be gaining strength,” Tower said. “I think the Fed will have a very hard time talking down the inflation hawks if the data comes in stronger than expected.”
The Dow edged up 4.56 points to 11,347.45, building on Thursday’s close, the index’s best since reaching 11,351.30 on Jan. 20, 2000.
Broader stock indicators were lower. The S&P; 500 inched down 0.18 point to 1,311.28, while the Nasdaq composite index fell 19.69, or 0.8%, to 2,342.86. An analyst’s downgrade of Dell helped send technology stocks lower.
Bond prices rose slightly, with the yield on the 10-year Treasury note slipping to 5.01% from 5.04% on Thursday. Bond prices and yields move in opposite directions.
The dollar was mostly lower against other major currencies. Gold futures rose $12.40 to $632.20 an ounce.
The major stock indexes ended the week with gains, due largely to a big advance Tuesday after minutes of the Fed’s late March meeting showed that the central bank was leaning toward ending its interest-rate hikes.
Inflation data released in subsequent sessions and oil’s ascent stifled the market’s enthusiasm, but the Dow still was up 1.9% for the week, while the S&P; 500 index ended 1.7% higher and the Nasdaq gained 0.7%.
Analysts say next week’s trading will depend on the market’s interpretation of government reports, which will include data on the first-quarter gross domestic product, employment costs, new-home sales and consumer confidence. Earnings reports also will continue flowing in.
In other market highlights:
* Google rose $22.10, or 5.3%, to $437.10, after reporting solid earnings after the bell Thursday. But the technology sector stumbled when Citigroup cut computer maker Dell to “sell” on concerns about slowing growth and weakening margins. EBay also saw a second day of losses after its lackluster quarter.
Dell sank $1.23 to $27.01, and EBay fell $1.68 to $35.09.
* Ford Motor posted its biggest loss in more than four years after taking $1.7 billion of pretax charges from its costly North American restructuring plan. Sales slid 9% amid a continued slump in U.S. vehicle demand. Ford fell 63 cents to $7.32.
* 3M rose $2.46 to $85.06 after saying its first-quarter profit swelled 17% and raising its sales forecasts.
* Dow component McDonald’s said its first-quarter earnings dropped 14% from a year earlier, when a tax break boosted its results. However, sales grew 6% to top Wall Street estimates. McDonald’s slid 48 cents to $34.60.
* Drug company Wyeth’s profit advanced 4% on strong sales of antidepressant Effexor and heartburn drug Protonix. Wyeth climbed 73 cents to $47.50.
Advancing issues led decliners 17 to 15 on the New York Stock Exchange, where final consolidated volume was 2.52 billion shares, down from 2.63 billion on Thursday.
The Russell 2000 index of smaller companies fell 2.55 points, or 0.3%, to 772.12, after spending most of the day in positive territory.
Overseas, Japan’s Nikkei stock average rose 0.5%. Britain’s FTSE 100 gained 0.8%, Germany’s DAX index added 0.5%, and France’s CAC-40 finished up 0.9%.
