Stocks Finish Week Marginally Higher
NEW YORK (
) -- Stocks finished Friday's quiet trading session on a mixed note with enthusiasm about strong earnings from the tech sector and fresh bank M&A tempered by resurgent concerns about eurozone debt.
The
Nasdaq Composite
rose 5 points, or 0.2%, to close at 2,643, boosted by above-consensus quarterly profit reports from tech bellwethers
Oracle
(ORCL) - Get Report
and
Research in Motion
(RIMM)
. The Nasdaq's intraday high of 2,651 touched levels the index hasn't seen since December 2007.
The
Dow Jones Industrial Average
fell 7 points, or 0.06%, to 11,492, getting a bounce off a session-low of 11,451. The
S&P 500
added 1 point to close at 1244.
Overall, the major U.S. equity indices closed the week marginally higher with the Dow rising 0.7%, the Nasdaq edging up 0.2% and the S&P 500 gaining 0.3%. The Dow has now advanced three weeks in a row and is up 4.4% so far in December and 10.2% year-to-date.
Trading was light as volumes stayed thin ahead of the holidays. A little over 2 billion shares changed hands on the New York Stock Exchange, while the Nasdaq exchange saw volume of 2.6 billion. Sentiment was mixed with 55% of the stocks advancing as 42% declined.
Intel
(INTC) - Get Report
,
Boeing
(BA) - Get Report
and
Alcoa
(AA) - Get Report
topped the blue-chip index. Pharmaceutical stocks
Merck
(MRK) - Get Report
and
Pfizer
(PFE) - Get Report
dragged the Dow lower.
American Express
(AXP) - Get Report
and
Chevron
(CVX) - Get Report
were other notable losers.
Oracle set the pace for the tech sector with its stock gaining 3.9% to $31.93 after the
software giant topped expectations with second-quarter adjusted earnings of 51 cents per share on sales of $8.65 billion. Analysts had been projecting a profit of 46 cents per share on sales of $8.34 billion.
Research In Motion saw its stock traded 1.6% higher to $60.20 after it
topped Wall Street's third-quarter profit expectations by a dime with earnings of $1.74 per share.
Shares of
Accenture
(ACN) - Get Report
jumped 8% to $50.32 after it upped its full-year forecast to earnings in the range of $3.08 to $3.16 per share, from a range of $3 to $3.08 per share. Sales are now expected to rise between 8% and 11%, from previous guidance for a year-end sales increase of 7% to 10%.
"The good earnings news from Oracle and RIMM has lent more optimism to earnings expectations," said Peter Tuz of Chase Investment Counsel. "There is a possibility of the S&P 500 earning $90 per share in 2011. At a PE of 15, that suggests a level in the mid 1300s for the S&P 500, which means the index is still attractively valued."
Moody's downgraded Ireland's government bonds by five notches to Baa1, three levels above junk status, and maintained its negative outlook on the country. The ratings announcement came on the same day that
European Union leaders agreed to a new system that will resolve future debt crises.
Concerns about European debt overshadowed optimism stemming from the passage of the tax-cut extension bill by Congress.
Late Thursday, the
U.S. House of Representatives voted 277 to 148 in favor of President Obama's compromise with Republicans to maintain the Bush-era tax cuts, extend unemployment benefits and introduce new credits for small businesses.
President Obama signed the bill into law Friday afternoon
.
Also, the Conference Board's Index of Leading Indicators rose by the most in eight months, in a further sign that the economy was steadily recovering. The index, which is designed to identify turning points in the business cycle rose 1.1% in November from a revised 0.4% the previous month. The index was projected to jump 1.2%, according to
Briefing.com
.
|
Pharmaceutical stocks showed some strength as well. Shares of
InterMune
(ITMN)
more than doubled to $34.89 after it received regulatory approval from the EU to market its lung treatment drug.
The big deal in the financial sector came courtesy
BMO Financial
(BMO) - Get Report
, which forged an agreement to buy
Marshall & Ilsley
(MI)
for $4.1 billion. Marshall & Ilsley's stock leapt 18.3% to $6.85 while BMO's stock shed 7% to $58.76.
The acquisition sparked buying in the regional bank stocks. Shares of
Regions Financial
(RF) - Get Report
,
Keycorp
(KEY) - Get Report
and
Fifth Third
(FITB) - Get Report
rose 2%, 4% and 1% respectively.
Shares of
Take-Two Interactive
(TTWO) - Get Report
were also strong, climbing 8.3% to $12.93 after the video game developer reported better than expected quarterly results.
Massey Energy
(MEE)
is exploring
options ranging from a sale of the company to a takeover of
International Coal Group
(ICO)
, according to a
Bloomberg
report. Shares of International Coal rose 0.3% to $7 while Massey's stock added 0.9% at $51.14.
Shares of
Visa
(V) - Get Report
and
Mastercard
(MA) - Get Report
were in focus after the Federal Reserve proposed to cap merchant fees on debit card transactions to 12 cents on Thursday. Shares of Visa fell 0.4% to $66.90 while that of Mastercard shed1% to $221.26.
Basic materials stocks rose despite a stronger dollar.
Freeport McMoRan
(FCX) - Get Report
rose 2% while steel companies
AK Steel
(AKS) - Get Report
and
U.S. Steel
(X) - Get Report
surged 6% and 3% respectively.
In commodity markets, the January crude oil contract gained 20 cents to settle at $88.02 a barrel. The February gold contract, the most actively traded gold future, rose $8.20 to settle at $1,379.20 an ounce.
The dollar strengthened against a basket of currencies with the dollar index up by 0.4%. The benchmark 10-year Treasury note strengthened 25/32, diluting the yield to 3.338%.
.
Overseas, Hong Kong's Hang Seng gained 0.2% while Japan's Nikkei slipped 0.07%. The FTSE in London finished down by 0.1% and the DAX in Frankfurtclosed lower by 0.6%.
-- Written by Melinda Peer and Shanthi Bharatwaj in New York
.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.