Friday's Market: Nasdaq Adds an Hour and 1.6%; Dow Falters
Techs led the market today, although
Nasdaq trading was disrupted for more than an hour.
For the second day in a row, a network problem forced the Nasdaq to suspend trading through its
SelectNet
and
Small Order Execution System
, or SOES. To make up for the lost trading hours, the Nasdaq stayed open an extra hour until 5 p.m. EDT. The Nasdaq Composite closed the day up 34 points, or 1.6%, to 2159.67, and the average finished the quarter, which ended today, ahead for the first time in more than a year.
For much of the day, optimism about the economy carried the major averages higher. But in the end, stock traders were just happy to head home for the weekend. "It's hard to make too much of a day like today," said David Memmott, head of block trading at
Morgan Stanley
.
The
Dow Jones Industrial Average, which counts Nasdaq stocks
Microsoft
(MSFT) - Get Report
and
Intel
(INTC) - Get Report
among its components, dropped 63.8 points, or 0.6%, to 10,502.40, under the weight of
Honeywell
(HON) - Get Report
.
The industrials began to falter when
General Electric
(GE) - Get Report
rejected an offer from
Honeywell
(HON) - Get Report
to lower its purchase price by $1.8 billion. GE said the proposal made no sense for its shareholders, further imperiling the would-be merger.
Economically sensitive stocks finished higher on the day. The
Morgan Stanley Cyclical Index
closed up 0.22%, while the
Philadelphia Stock Exchange/KBW Bank Index
finished ahead 0.01%. Both of those sectors benefit from interest rate cuts and finished higher for the week. Defensive stocks ended the day lower. The
American Stock Exchange Pharmaceutical Index
finished down 2.5%.
A key report on the manufacturing sector showed a lesser degree of contraction than in the past. The
Chicago purchasing managers index, released at 10 a.m. EDT, rose to 44.4 in June from 38.7 in May, well above expectations and the highest reading since December. (A reading below 50 signals contraction, but 42 indicates a recovery.) "The rise could indicate the worst is over," said the Chicago arm of the
National Association of Purchasing Managers
.
For the second time this week, economic data showed strength in consumer confidence. The University of Michigan's
consumer sentiment index rose to 92.6 in June, the highest level since January, from 92 in May. Earlier in the week the Conference Board's
consumer confidence index increased for the second straight month to its highest point for the year.
But the revised estimate for first-quarter
gross domestic product, revealed a less rosy outlook. The figure was lowered to an annual rate of 1.2%, compared with the earlier 1.3% estimate. The government also reported that corporate profits declined by 6.2% in the first quarter, the sharpest drop in three years, and much more than the 3.1% decline estimated a month ago.
The
S&P 500 ended down 0.2% to 1224.38. The
Russell 2000 had a nice day, gaining 1.9% as traders prepare for rebalancing. After today's close, the annual Russell rebalancing, which forces money managers who run funds that track the index to buy and sell stocks accordingly, will be official.
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