Stocks end mixed on the day, up for week

Wall Street ended its second straight winning week with a moderate advance Friday, overcoming concerns about consumer confidence and inflation.

After slumping early in the session in response to weak consumer confidence and a surge in oil prices, investors seemed to turn their attention to broader signs, including the week’s generally satisfactory earnings reports, that suggested government efforts to steady the economy may be working. That shift in focus sent stocks up late in the day.

The Reuters/University of Michigan consumer sentiment index came in with its lowest reading since the early 1980s, but Tom Lydon, president of Global Trends Investments in Newport Beach, said the quarterly earnings reports persuaded investors that “overall, things aren’t all that bad.”

“I think a lot of people went into the weekend feeling they didn’t want to be on the short side,” Lydon said.

The consumer sentiment index fell to 62.6 for April from 69.5 a month earlier, reflecting Americans’ concern about rising energy and food prices.

Though consumer spending represents about 70% of the economy, UBS equity strategist David Bianco said that was “the wrong thing to be looking at” to gauge the prospects for Standard & Poor’s 500 companies.

“Business activity is strong in the U.S. and especially globally,” he said. “That’s far more important.”

The Dow Jones industrial average rose 42.91 points, or 0.3%, to 12,891.86 after falling more than 100 points earlier in the session. It closed the week with a 0.3% gain, up 42.50.

Broader stock indicators were mixed on the day. The S&P; 500 index gained 9.02 points, or 0.6%, to 1,397.84 and finished the week up 7.51 points, or 0.5%.

The Nasdaq composite index, depressed by disappointment with a Microsoft forecast, fell 5.99 points, or 0.3%, to 2,422.93 after dropping as much as 1.6% during the session. But advancers were well ahead of decliners in the broader Nasdaq market, and for the week the index gained 19.96, or 0.8%.

On the New York Stock Exchange advancing issues outpaced decliners by more than 3 to 2.

Bond prices fell ahead of the Federal Reserve’s meeting on interest rates Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite to its price, rose to 3.87% from 3.83% on Thursday.

Oil prices, meanwhile, jumped on a series of troubling events overseas, including word that a ship under contract with the U.S. Navy fired flares and warning shots at two small boats of unknown origin in the Persian Gulf. In addition, there was an attack on a pipeline in Nigeria and a looming refinery strike in Scotland.

Light, sweet crude shot as high as $119.50 a barrel on the New York Mercantile Exchange before falling back to settle at $118.52, up $2.46.

The price of gold gained 40 cents to $887.20 an ounce, and the dollar was mixed against foreign currencies, with the euro losing 0.005 to $1.564.

Craig Hester, chief executive at Hester Capital Management, said stocks were likely to fluctuate as investors digest this week’s earnings reports and await the Fed’s decision.

“The big risks I see for stocks right now are earnings,” he said, noting that next week’s economic data should also give investors a better picture. Reports are due on gross domestic product and employment.

So far, said Charlie Smith, chief investment officer at Fort Pitt Capital Group, “the earnings have come in on the financial side pretty much where people expected, and in terms of the industrial side, a little bit better than expected.”

Microsoft fell $1.97, or 6.2%, to $29.83 after its first-quarter report. The tech leader said after the closing bell Thursday that worldwide sales next year should offset U.S. weakness.

Goodyear Tire & Rubber rose $1.66, or 6.1%, to $28.91 after posting a first-quarter profit and higher revenue. The tire maker, which reported a loss for the same period a year earlier, said it focused on higher-priced tires and international markets.

American Express rose $2.59, or 5.7%, to $47.77 after reporting that first-quarter earnings fell 6% as more U.S. cardholders failed to make their payments. The credit card lender’s total provisions for credit losses jumped 48% from a year earlier to $1.27 billion. However, the company said cardholders were continuing to spend and strength abroad had helped to make up for troubles in the U.S.

The Russell 2,000 index of smaller companies rose 4.81 points, or 0.7%, to 721.88. For the week, it gained 0.81, or 0.1%.

Overseas, Japan’s Nikkei stock average closed up 2.3%. Britain’s FTSE-100 rose 0.7%, Germany’s DAX index advanced 1.1% and France’s CAC-40 rose 1%.