Stocks open lower after prior day’s big jump
The stock market’s earnings-driven rally stalled Friday after Microsoft and Amazon.com reported weak quarterly sales.
The Dow Jones industrials rose 23.95 points, or 0.3%, to 9,093.24, its highest finish since Nov. 5. The S&P; 500 index rose 2.97 points, or 0.3%, to 979.26.
The Nasdaq composite index, however, fell 7.64 points, or 0.4%, to 1,965.96, breaking a 12-day winning streak, as tech stocks lost ground.
The Russell 2,000 index of smaller companies rose 0.5%.
Rising stocks outpaced decliners by about 5 to 3 on the New York Stock Exchange.
In the last two weeks, the three major indexes shot up 11% or more as investors found enough justification in the latest corporate results and economic data to resume the rally that began in March but stalled in June.
This week, heavy-equipment maker Caterpillar, manufacturing conglomerate 3M and Ford Motor turned in better-than-expected results or boosted their forecasts for the rest of the year.
For the week, the Dow rose 4%, the S&P; 500 index added 4.1% and the Nasdaq gained 4.2%.
Another factor driving the recent surge, some analysts say, has been short-covering, in which a rising market prompts a race to buy by investors who earlier sold borrowed shares in a bet that stock prices would fall. That rush to cover bad bets can hasten the market’s climb.
Analysts also say some money managers are afraid of missing out on a continued rally. “There is so much cash still on the sidelines,” said David Darst, chief investment strategist at Morgan Stanley Smith Barney. “People missed it and they’re beginning to worry that the train isn’t going to come back for them.”
Investors will be bracing for another wave of data next week that could either smother or further fuel the rally. Quarterly results are due from big companies including Kellogg, ExxonMobil Corp. and Walt Disney. Economic snapshots next week include numbers on housing, consumer confidence and the economy’s overall output.
In other market highlights Friday:
* Treasury yields slipped. The benchmark 10-year T-note fell to 3.67% from 3.7% late Thursday.
* The dollar was mixed, while gold prices fell.
* Oil futures rose 89 cents to settle at $68.05 a barrel.
* Overseas, key stock indexes rose 1.6% in Japan and 0.4% in Britain. Shares fell 0.3% in Germany and 0.2% in France.
