Wall St. ends week quietly
Wall Street ended a strong week on a quiet note Friday after the Commerce Department said that housing construction in October fell to its lowest level in more than six years.
The news rekindled some investors’ concerns that the economy might slow too sharply.
But market sentiment was helped by another drop in crude oil prices, to a 17-month low.
Major stock indexes were mixed. The Dow Jones industrial average climbed 36.74 points, or 0.3%, to 12,342.56, a fourth straight record close.
The Standard & Poor’s 500 added 1.44 points, or 0.1%, to 1,401.20, its first close above 1,400 since 2000.
But losers topped winners by about 6 to 5 on the New York Stock Exchange.
On Nasdaq, the technology-heavy composite index slipped 3.20 points, or 0.1%, to 2,445.86 after closing Thursday at its highest in nearly six years.
For the week the Dow rose 1.9%, bringing its year-to-date gain to 15.2%. The Dow is on track for its best calendar-year gain since 2003, when it soared 25.3% in the first year of the current bull market.
The S&P; 500 was up 1.5% for the week and is up 12.2% this year. The Nasdaq index jumped 2.4% for the week. Its year-to-date gain is 10.9%.
Jack Ablin, chief investment officer at Harris Private Bank, said that much of the week’s optimism came from lower-than-expected October inflation readings. If the trend continues, it could make it easier for the Federal Reserve to justify lowering short-term interest rates in 2007.
“It gives the Fed a lot more flexibility. And elbow room is good when it comes to trying to navigate the economy,” Ablin said.
Todd Leone, a veteran trader at Cowen & Co., says that the markets have been re-energized by the spate of big takeover offers in recent weeks, such as those for Clear Channel Communications and Delta Air Lines this week.
“That just reprices the market. That tells you stocks are worth more than we ever thought,” he said.
Still, the weak October housing data reminded Wall Street that the economy was vulnerable to a deeper slowdown, analysts said.
That drove some investors to buy bonds: The benchmark 10-year Treasury note yield slid to 4.60% from 4.67% on Thursday.
In commodities trading, near-term crude oil futures fell 45 cents to $55.81 a barrel on the New York Mercantile Exchange, the lowest since June 2005.
But the trend in oil also may be pointing to a weaker economy, analysts said: U.S. crude inventories have continued to climb, indicating that demand isn’t robust enough to soak up oil supplies on world markets.
Among Friday’s market highlights:
* The day’s hottest action was in the initial public offering of Nymex Holdings, parent of the New York Mercantile Exchange. The shares soared $73.99 to $132.99 on their first trading day, mirroring the rousing receptions investors have given share offerings of other commodity and stock exchanges in recent years.
Also gaining on its first trading day was solar-power module maker First Solar, which jumped $4.74 to $24.74.
* Shares of home builders, already down sharply this year, were little changed despite the October housing data. Toll Bros. was up 18 cents at $29.89, KB Home rose 26 cents to $49.07 and Lennar fell 6 cents to $49.34.
* Starbucks posted a 5% drop in its fiscal fourth-quarter profit on rising costs. The stock fell $2.01 to $37.42, though it still is up 25% this year.
* Ann Taylor Stores slumped $3.11 to $36.57. The retailer said earnings in the current quarter would be below expectations.
* Mattel slipped 14 cents to $23.66 despite raising its annual cash dividend payment 30%, to 65 cents a share.
