Mixed Finish for Wall Street
Robert Holmes
11/30/07 - 04:58 PM EST
Updated from 4:16 p.m. EST
Stocks closed out a big week -- and a brutal month -- with a mixed session Friday, as blue chips climbed on rate-cut hopes but tech stocks lagged behind.
The
Dow Jones Industrial Average rose 59.99 points, or 0.45%, to 13,371.72, paring gains after jumping as many as 154 points earlier. The
S&P 500 added 11.42 points, or 0.78%, to 1481.14, fueled by a surge in financial stocks.
The
Nasdaq Composite fell 7.17 points, or 0.27%, to 2660.96, as the tech-heavy index was pulled down by a weak outlook from
Dell(DELL Quote - Cramer on DELL - Stock Picks).
"We faded off a little at the end, which is understandable," said Larry Wachtel, senior market analyst with Wachovia Securities. "People probably took some profits headed into the weekend. It was still a respectable, but asking the market to further dazzle us when it already has already was a bit too much."
The market notched its best weekly performance in roughly eight months, but the major averages still closed out November with heavy losses. The Dow was lower by 4% for the month, the S&P 500 ended down 4.4%, and the Nasdaq lost 6.9%.
"It might take a little time for people to put November behind them and regain confidence," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "There's still concern the fourth quarter will have weak gross domestic product and earnings growth going forward. There's a bit of change in sentiment, but it's not a tidal wave by any means."
Breadth was positive heading into the weekend. On the
New York Stock Exchange, 4.29 billion shares changed hands, as decliners topped advancers by a 2-to-1 margin. Volume on the Nasdaq reached 2.46 billion shares, with losers beating winners nearly 8 to 7.
Stocks initially rallied after a Thursday evening speech from Fed Chairman Ben Bernanke in Charlotte, N.C. In his remarks, Bernanke suggested that the U.S. housing slump and recent turmoil in the markets may be hitting the economy.
"The combination of higher gas prices, the weak housing market, tighter credit conditions and declines in stock prices seem likely to create some headwinds for the consumer in the months ahead," Bernanke said.
Most took Bernanke's remarks as a sign that the Fed will be inclined to cut rates again when the Federal Open Market Committee convenes next on Dec. 11.
In recent days, traders had celebrated remarks from Fed Vice Chairman Donald Kohn, who also implied that rate cuts are looming. Kohn's speech contributed to the biggest two-day rally on Wall Street in nearly five years earlier this week.
"The strong rally we've had over the past few days is due to a priced-in interest rate cut," said Peter Cardillo, chief market economist with Avalon Partners. "Now we have to see if we can get out of this volatile trading range or if we return to square one. We're going to be very data-dependent heading into next week."
Last time out, stocks endured a seesaw session before ultimately notching gains. The Dow tacked on 22.28 points to 13,311.73. The S&P 500 was up 0.70 point to 1469.72. The Nasdaq also bounced around the flatline before finishing ahead by 5.22 points to 2668.13.
The Nasdaq's pressure in the new session came after Dell offered on a weak outlook for consumer sales. The computer maker did, however, post a 27% rise in third-quarter profit, meeting Wall Street's target. Dell lost $3.60, or 12.8%, to $24.54.
Investors also digested data on one of the Fed's key inflationary figures. The Commerce Department said personal income rose 0.2% in October and spending advanced 0.2%, both slightly below expectations.
The core personal consumption expenditure index -- a Fed favorite -- rose 0.3% as expected, but is now up 2.9% from a year ago.
Also on the economic front, the Chicago Purchasing Managers said its manufacturing index rose to a reading of 52.9 in November from 49.7 last month. Additionally, the Census Bureau said construction spending fell 0.8% in October, worse than expected.
Elsewhere, a report in
The Wall Street Journal said that the U.S. government and lenders were working on an agreement that would temporarily freeze rates on subprime mortgage loans.
Following that news,
Freddie Mac (FRE Quote - Cramer on FRE - Stock Picks) added 18.8%,
Fannie Mae (FNM Quote - Cramer on FNM - Stock Picks) was up 18.6%,
Countrywide (CFC Quote - Cramer on CFC - Stock Picks) gained 16.3%, and
Citigroup (C Quote - Cramer on C - Stock Picks) rose 3.1%.
The report also lifted homebuilder stocks.
D.R. Horton(DHI Quote - Cramer on DHI - Stock Picks) climbed 14.3%, while
Lennar(LEN Quote - Cramer on LEN - Stock Picks) and
KB Home(KBH Quote - Cramer on KBH - Stock Picks) added 7.2% and 8%, respectively.
Motorola (MOT Quote - Cramer on MOT - Stock Picks) rose 2% after word that CEO Ed Zander will step down by the end of the year. Zander will still remain chairman, while Greg Brown will take over the reins.
The earnings calendar was light, with
Tiffany(TIF Quote - Cramer on TIF - Stock Picks) one of the few names reporting. The jeweler posted a third-quarter profit more than tripled and lifted its guidance for the year. Still, the stock ended down $2.32, or 4.8%, to $46.43.
Oil prices fell $2.30 to end the week at $88.71 a barrel. Gold and silver futures also fell hard for the week.
U.S. Treasurys were declining in price, pushing yields upward. The 10-year note was down 10/32 to yield 3.97%. The 30-year bond was off 29/32 in price, yielding 4.40%.
Overseas markets were mostly higher. In Asia, Hong Kong's Hang Seng rose 0.6% overnight, and Japan's Nikkei 225 added 1.1%. Among European bourses, London's FTSE 100 tacked on 1.3% and Germany's Xetra Dax was up 1.4%.
