Dow Hits New Record
A better than expected report on the consumer's mood sparked buying. Investors also eyed China's moves to cool its economy and Friday's options expirations
U.S. stocks were higher in afternoon trading on Friday, pushed up by better-than-expected consumer sentiment data on a day when many options expire. The Dow industrials touched yet another new record, while the S&P 500 index came within 7 points of its all-time high.
The Dow Jones industrial average was in record territory, up 0.43% to 13,534.51. The broader S&P 500 index was moving closer to its March 2000 record close of 1527.46. It was trading at 1519.83, up 0.47% by the late afternoon. The tech-heavy Nasdaq Composite index was up 0.51% to 2,552.45.
Investors are also watching China, which announced it would widen the trading band on the yuan and tighten monetary policy, Action Economics says.
The University of Michigan's consumer sentiment index came in at 88.7 for May, higher than the expected 87.1, which was also the April reading. Action Economics says the effect of soaring stock prices more than offset the ongoing drag on sentiment from soaring gasoline and food prices.
John Wilson, chief technical strategist at Morgan Keegan, said the data probably helped push the market up today. He sees positive signs that the market will go higher and the S&P 500 will reach all-time highs over the long term. Stocks remain significantly undervalued compared to bonds, he said. However, there is a lot of skepticism and many investors aren't participating. "There's plenty of people out there that are very nervous," Wilson said.
Action Economics says three key releases come out next week, back-loaded at the end of the week. April durable goods and new home sales are on Thursday and existing home sales on Friday. The data will be scrutinized for clues on how the economy is doing. Recent data suggests it is bouncing back from a let down in the first quarter, Action Economics says.
In the energy markets on Friday, June NYMEX crude oil ended the day at $64.94 a barrel, up 8 cents. Action Economics said pre-weekend profit weighed on prices a bit, and the market is still focused on gasoline supplies. Oil prices jumped $2.30 on Thursday after news of U.S. refinery outages.
Among stocks moving Friday, Nordstrom (JWN) was up after reporting first quarter earnings. The department store chain posted earnings of 60 cents per share, vs. 48 cents a year ago. Same-store sales were up 9.5%.
Kohl's Corp. (KSS) also was trading higher after reporting earnings per share of 64 cents in the first quarter, up from 48 cents a year ago. Same-store sales were up 3.9% and total sales were 12% higher.
Intuit (INTU) also posted strong third-quarter earnings of $1.04 per share, up from 84 cents a year ago. The firm also announced an $800 stock buyback program. It was up more than 13% in mid-morning trading.
aQuantive (AQNT) shares shot up after announcing it would be acquired by Microsoft (MSFT) in a $6 billion deal. Microsoft agreed to pay $66.50 per share, a premium of more than 85% on Aquantive's Thursday closing price of $35.87.
ValueClick (VCLK), an Internet advertising peer of Aquantive, was also up Friday on news of the deal. Separately, the firm announced the Federal Trade Commission was investigating some of its marketing practices.
UAL Corp. (UAUA) was lower Friday on news it would reduce its domestic capacity growth plans by 2%.
Verizon Communications (VZ) was upgraded by Citigroup Friday, pushing shares up.
Trump Entertainment (TRMP) was up after the firm said it was approached by bidders interested in its Atlantic City casinos.
European stock markets finished higher on Friday. In London, the FTSE 100 index was up 1.10% to 6,651.80. Germany's DAX index rose 1.40% to 7,604.83. In Paris, the CAC 40 index was up 1.21% to 6,099.81.18.
Asian markets fell Friday. In Japan, the Nikkei index fell 0.57% to 17,399.58. In Hong Kong, the Hang Seng index fell 0.43% to 20,904.84. In China, the Shanghai Composite index fell 0.45% to 4,030.26.
Treasury Market
Bonds, which started Friday's session on an up note, turned lower following the stronger than expected Michigan Consumer Sentiment survey that puts pressure on Fed to keep rates tight.
The 10-year Treasury note was down 02/32 to 97-30/32 for a yield of 4.768%, the 2-year note was flat at 99-15/32 for a yield of 4.797%, and the 30-year bond was down 04/32 to 98-10/32 for a yield of 4.924%. |
