Updated from 4:06 p.m. EDT
Stocks ended higher Friday as bargain-hunting kicked in, boosted by upbeat analyst comments on
Dow Jones Industrial Average
rose 83.55 points, or 0.9%, to 9119.59, while the
gained 18.04 points, or 1.1%, to 1733.90. The
advanced 9.43 points, or 1%, to 998.13.
"People are surprised by the strength of the market, by how fast things have moved, so there's a reach for performance going on," said Sunil Reddy, portfolio manager at Fifth Third Bank. "There are lots of skeptics out there, which is healthy, and this strength clearly has to be caught up
to by earnings. But in a six-month to one-year horizon, the picture is positive."
Although the buying weakened near the closing bell Friday, the Nasdaq finished the week with a 4.2% gain, despite Thursday's decline. The Dow rose 0.5%, while the S&P climbed 1.3% this week.
shares were among the most active by volume after the company reported a 14% decline in second-quarter earnings, blaming weaker demand for plastics and power-plant turbines. In a conference call Friday, the conglomerate narrowed its full-year profit outlook to $1.55 to $1.61 a share, at the low end of its previous forecast. Shares fell 7 cents, or 0.3%, to $28.12.
Intel gave tech stocks a boost, moving up 42 cents, or 1.9%, to $23.33, after Thomas Weisel upgraded the stock to outperform from peer perform on expected improvement in information-technology spending.
Dell also gained ground after an analyst at Prudential Equity Group initiated coverage of the stock with a buy rating and set a $49 price target within the next 18 months, saying the company is the "best-positioned" in its field. Dell climbed 70 cents, or 2.1%, to $33.56.
Banc of America upgraded Home Depot to buy from neutral, on an anticipated improvement in sales. Shares rose 69 cents, or 2.1%, to $33.12.
Trading volume was relatively light, with 1.2 billion shares exchanged at the
New York Stock Exchange
and 1.5 billion on the Nasdaq. Advancers outpaced decliners by a margin of 2 to 1 on both bourses.
"This rally will eventually exceed people's expectations. The Nasdaq's upside is limited, considering what we've seen, but we're still facing positive momentum, with investors buying on the dips," said Peter Boockvar, an equity strategist at Miller Tabak & Co.
In other corporate news, Dow component
fell 6 cents, or 0.1%, to $43.94, amid reports that it is under investigation for alleged improper accounting and deceptive marketing techniques.
Companies facing asbestos claims were in the news after the Senate passed a plan to create a $108 billion trust fund to compensate victims who came in contact with the carcinogenic material. Oil-services company
fell 15 cents, or 0.7%, to $22.60.
, a chemicals company, lost 34 cents, or 8.2%, to $3.80. Both are up against significant asbestos-related litigation.
The producer price index rose 0.5% in June, slightly above the expected 0.3%, compared with a 0.3% decline the previous month. The increase was due to higher oil prices, since wholesale inflation excluding energy, or the so-called core PPI, fell 0.1%. Economists had expected a 0.1% rise for the core rate, following a 0.1% advance in May.
"The real story was the unexpected 0.1% dip in the core PPI. Even in the face of massive stimulus, the reality is that deflationary forces are still squarely on the front burner," wrote David Rosenberg, chief North American economist at Merrill Lynch.
Treasury prices were higher, with the yield on the 10-year note at 3.63%. Brent crude futures were down in London. The dollar was stronger against the yen and euro.
Overseas markets were mixed, with London's FTSE 100 up 0.7% at 4058 and Germany's Xetra DAX up 1.7% at 3324. In Asia, Japan's Nikkei closed 3.22% lower at 9635, while Hong Kong's Hang Seng shed 0.72% to 9911.
On Thursday, the Dow closed 120 points lower at 9036. The S&P 500 lost 13 points to 988, while the Nasdaq shed 31 points to 1715.