Updated from 4:10 p.m. EDT
Stocks had a big July overall, but the major averages fell in the last session of the month as traders eased out of long positions taken ahead of the government's gross domestic product report.
Dow Jones Industrial Average
lost 64.64 points, or 0.6%, to 10,640.91 Friday, and the
was lower by 9.54 points, or 0.77%, to 1234.18. The
declined 13.61 points, or 0.62%, to 2184.83. The 10-year Treasury was down 22/32 in price to yield 4.28%, while the dollar rose against the yen and euro.
"Today was the first day where we saw some profit-taking stick," says Barry Hyman, equity market strategist with Ehrenkrantz King Nussbaum. "The excuse du jour was the Treasury bond prices. While the GDP number was nice and strong enough to interpret it as an economy still growing, the yield curve has been flattening dramatically. It's difficult to make money with the yield curve the way it is."
About 1.39 billion shares changed hands on the
New York Stock Exchange
, with decliners beating advancers by a 3-to-2 margin. Trading volume on the Nasdaq was 1.60 billion shares, with decliners outpacing advancers 9 to 7.
For the week, the Dow fell 0.09%, while the S&P gained 0.04% and the Nasdaq added 0.23%. For July, the Dow and S&P 500 were both up 3.5%, and the Nasdaq was higher by 6.2%.
The Dow's biggest percentage losers Friday were
, lower by 2.1%,
off 1.9% and
, down 1.8%.
were the Dow's best gainers, up 2.9% and 1.8%, respectively.
"We are still in technically good shape, as the New York Stock Exchange advance/decline line continues to surge to new highs," says Paul Mendelsohn, chief investment strategist with Windham Financial. "However,
we remain in extremely overbought conditions, indicating we may be somewhere near an intermediate top."
Before the open, the Commerce Department pegged gross domestic product growth at 3.4% in the second quarter. The GDP number was roughly in line with market expectations and represents a deceleration from the first quarter's 3.8% growth rate. Two inflation measures, the GDP's chain deflator and the separate employment cost index, came in below forecasts.
"We're still moving along, with the ninth quarter straight above 3%," says Paul Nolte, director of investments with Hinsdale Associates. "Inflation continues to stay relatively low, especially on the cost side, confirming what the Beige Book said."
"The big story is the inventory hit," says Ian Shepherdson, chief economist with High Frequency Economics. "It fell $6.4 billion and took a huge 2.3% off growth. Final sales rose by a massive 5.8%, the biggest gain since third quarter 2003. This was driven by investment, foreign trade and consumption."
Oil traded near $61 a barrel on another big day for energy company earnings. The September contract rose 67 cents to close at $60.57, up more than 3% from its close a week ago. In energy company news, Chinese oil company
is reportedly nearing a decision on whether to raise its bid for
to $20 billion or drop it altogether.
Cnooc's competing suitor,
, has a $17 billion offer on the table. The company reported stronger-than-expected earnings Friday. Chevron fell 93 cents, or 1.6%, to $58.01.
Two other economic reports were released Friday. The University of Michigan's consumer sentiment index rose to 96.5 in July from 96.0 in June, while the Chicago Purchasing Managers' index came in at 63.5 in July from 53.6 in June, well above expectations.
Shepherdson notes that "the Chicago PMI is often influenced by the strength of the auto market, which has been very robust in the past two months as a result of General Motors-led price cuts. This is very welcome but could be a local story."
Tech earnings continue to dominate the headline docket, with
reporting a 70% rise in second-quarter profits to $198.6 million, or 27 cents a share, beating estimates by 2 cents. At $700 million, sales were about $12 million light. Shares slid $1.84, or 7.7%, to $21.95.
swung to a second-quarter loss of $3.6 million, or 2 cents a share, about a penny narrower than expected. The video-game maker cited higher advertising and production costs for the loss. Activision added $1.38, or 7.3%, to $20.35.
rose sharply after reporting a second-quarter earnings beat and raising guidance. The company had adjusted earnings of 32 cents a share in the period, beating estimates by a nickel. The stock surged $4.11, or 14.2%, to close at $33.01.
rose after the supermarket chain said second-quarter earnings were $42 million, or 60 cents a share, on sales of $1.13 billion. Analysts were forecasting 57 cents a share on $1.1 billion. Whole Foods was up $14.19, or 11.6%, to $136.51.
said after the bell Thursday that fiscal fourth-quarter net income rose to $105 million, or 52 cents a share, from $96 million, or 48 cents a share, a year ago. Sales rose 9.3% to $492 million in the quarter. Analysts expected earnings of 48 cents a share on revenue of $497 million, according to Thomson First Call. The stock added $2.52, or 5.1%, to $51.70.
closed up 14.2% on a number of announcements from the chain restaurant company. After the bell Thursday, Wendy's posted second-quarter earnings of $70.8 million, or 61 cents a share, compared with $71.6 million, or 62 cents, in the year-ago period. The Thomson First Call consensus was for 57 cents a share. Looking ahead, though, the company cut its 2005 EPS target to a range of $2.20 to $2.26 from the previous range of $2.29 to $2.35.
Wendy's also announced an IPO of 15% to 18% of its Tim Horton's chain as well as the closure of 40 to 60 of its underperforming restaurants. The company raised its annual dividend by 25% to 68 cents a share. Additionally, Wendy's authorized the buyback of up to $1 billion worth of common stock. Shares rose $6.43 to $51.70.
Also late Thursday, teen retailer
said that same-store sales in July fell 5% from a year ago. The company cited weakness in sales for men's apparel and women's apparel and accessories. Hot Topic now expects second-quarter earnings of 2 cents to 4 cents a share. The Thomson First Call consensus currently pegs the company's earnings at 8 cents a share. Shares lost $1, or 5.5%, to $17.04.
In ratings moves, Lehman Brothers upgraded DuPont to overweight from equal weight, citing valuation of shares. The firm also raised its stock price target to $53 from $50. The stock was higher by 75 cents, or 1.8%, to finish at $42.68.
Overseas markets were mostly higher, with London's FTSE 100 adding 0.2% to 5282, while Germany's Xetra DAX fell 0.1% to 4886. In Asia, Japan's Nikkei rose 0.4% to 11,900, while Hong Kong's Hang Seng gained 0.5% to 14,881.
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