US blue chips ended slightly higher while the Nasdaq retreated on Friday, as worries about oil prices at 21-year highs and rising interest rates tempered positive earnings and economic data that underscored the economy's strength.
Altria Group Inc propped up the blue-chip Dow, helped by a bullish brokerage upgrade. But Cisco Systems Inc and Dell Inc were the biggest drags on the Standard & Poor's 500 and the Nasdaq.
Dell, the No 1 personal computer maker, on Thursday said its earnings were held back by computer memory prices, and analysts worried the trend would affect results in future quarters.
The major market benchmarks notched their third straight week of losses, bringing them near their 2004 lows. All three gauges are also in negative territory for the year.
Crude oil for June delivery hit $41.56 a barrel on Friday, the highest price since the New York Mercantile Exchange began trading crude oil futures 21 years ago. Worries about the US gasoline supply continued to sustain the energy market's long rally, traders said.
The Dow Jones industrial average edged up 2.13 points, or 0.02 percent, to 10,012.87, while the broader S&P 500 Index slipped 0.78 of a point, or 0.07 percent, to end at 1,095.66, based on the latest available figures. The technology-laced Nasdaq Composite Index slipped 21.78 points, or 1.13 percent, to 1,904.25.
Traders said volume was relatively muted, and cautioned against reading too much into the market's moves.
Roughly 1.34 billion shares changed hands on the New York Stock Exchange, less than the 1.4 billion daily average for last year. About 1.52 billion shares were traded on Nasdaq, below last year's 1.69 billion daily average.
"Volume today is very light. We're not seeing a lot of market participation," said Michael O'Hare, head of block trading at Lehman Brothers.
The broader S&P 500 was also having difficulty breaking through 1,100, seen by market players as a technically significant resistance level, O'Hare said.
On the economics front, consumer prices outside the energy sector rose in April, boosting expectations the Federal Reserve will lift interest rates as early as next month.
The Consumer Price Index, the most widely used gauge of US inflation, edged up an unexpectedly small 0.2 percent in April, the Labor Department said. But the core CPI, which strips out volatile food and energy costs, climbed 0.3 percent, slightly above Wall Street forecasts.
Separately, the Fed said industrial output jumped 0.8 percent in April, as the factory sector continued a strong rebound from years of weakness.
"The economic data was in line, particularly on the inflation front, which supports the idea that the Fed's taking a measured approach to higher rates will more likely prevail, rather than the sooner and sharper rate increases that the markets had seemed to fear," said Jack Caffrey, vice president at J.P. Morgan Private Bank.
"A growing economy should result in higher earnings, and ultimately, earnings growth drives valuations in the long term," Caffrey added. "We think the environment for equity investments is still positive."
For the week, the Dow fell 1.0 percent, the S&P 500 slipped 0.3 percent, and the Nasdaq dropped 0.7 percent.
Shares of Altria, the parent company of the No. 1 US cigarette maker Philip Morris USA, added 98 cents, or 2.0 percent, to $49.88, after UBS raised its rating on the food and tobacco company to "neutral" from "reduce."
Kohl's Corp shares gained, a day after the department store operator reported its quarterly earnings rose slightly, and delivered an upbeat earnings forecast for the second quarter and backed its full-year view. Kohl's shares rose 94 cents, or 2.2 percent, to $43.57.
Nortel Networks Corp topped the New York Stock Exchange's most actively traded list, after it said a US grand jury has subpoenaed records from the company as part of a criminal investigation.
Shares of Nortel, North America's largest maker of telecommunications equipment, slid 23 cents, or 6 percent, to $3.57. The subpoena comes after Nortel fired its chief executive and two other executives last month during a probe into accounting problems.
On the Nasdaq, Dell shares fell $1.08, or 3 percent, to $34.72. On Thursday, Dell reported its quarterly revenue jumped 21 percent and earnings rose 22 percent, but Wall Street analysts had hoped for slightly better results.
Cisco's stock dropped 52 cents, or 2.4 percent, to $21.24, and was the Nasdaq's second most-active issue.
BEA Systems Inc also slid, a day after the business software maker posted lower license sales due to poor execution in the Americas and strong competition from IBM, even though its profit met Wall Street estimates. BEA shares sank $2.43, or 22.5 percent, to $8.35, and topped the Nasdaq's most-active list.
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