Stocks Count Slim Gains - TheStreet

Stocks Count Slim Gains

A threat from S&P that it might cut its ratings on some of the GSEs' securities limits the rally for blue chips.
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Updated from 2:36 p.m. EDT

Technology shares were strong Friday, but new trouble for

Fannie Mae

(FNM)

and

Freddie Mac

(FRE)

undercut what had been a modest blue-chip rally sparked by decent economic data.

The

Dow Jones Industrial Average

rose 21.41 points, or 0.2%, to 11,370.69, and the

S&P 500

added 5.22 points, or 0.4%, to 1257.76. The

Nasdaq

was better by 30.42 points, or 1.3%, at 2310.53.

Earlier, the major averages had been in even better shape, but then word came down from Standard & Poor's that it might lower its ratings on Fannie and Freddie's subordinated debt and preferred stock. Following that development, shares of both government-sponsored mortgage buyers fell, Freddie by 6% and Fannie by 4%.

The market got an initial boost on a report from the government that durable goods orders unexpectedly increased last month, whereas many economists were looking for a slight decline.

New-home sales were also better than predicted, running at a 530,000 annualized pace in June, about 27,000 more than analysts foresaw. That was down from May, but those figures were upwardly revised to a rate of 533,000.

The two somewhat uplifting reports gave investors a chance to look past a separate, dour reading on troubled homes. Numbers from RealtyTrac revealed that second-quarter foreclosure filings around the nation were more than twice what they were in the same period a year earlier and up 14% from the first quarter.

Still, by finishing in the green U.S. stocks at least erased a bit of the pain inflicted during the prior session. The market was crushed on Thursday after weak data on existing-home sales and a drop in financials, including

Citigroup

(C) - Get Report

,

AIG

(AIG) - Get Report

and

JPMorgan Chase

(JPM) - Get Report

.

On the corporate side,

Honda

(HMC) - Get Report

said its first-quarter profit was up 8% from the same period a year ago as its small cars sold well owing to consumers looking for fuel-friendly options.

Mutual fund company

Legg Mason

(LM) - Get Report

swung to a quarterly loss of $31 million in its most recent quarter, compared with a profit of nearly $200 million in the comparable 2007 period.

Movies-by-mail renter

Netflix

(NFLX) - Get Report

was one of the day's winners, rising 4% after boosting its earnings outlook for the full year and topping estimates for the second quarter.

Arch Coal

(ACI) - Get Report

,

Belo

(BLC)

and

Black & Decker

(BDK)

also exceeded analysts' targets.

Late in the session,

General Electric

(GE) - Get Report

announced that it would consolidate its operations from six major business segments into four, GE Technology Infrastructure, GE Energy Infrastructure, GE Capital and NBC Universal. Shares of GE were unchanged.

Among commodities, crude oil continued losing ground, this time falling $2.23 to $123.26 a barrel. Brent was off $1.92. The

United States Oil

(USO) - Get Report

, an ETF that tracks crude futures, lost 2.2%.

Treasury securities were lower in price. The 10-year was down 25/32, yielding 4.10%, and the 30-year was falling 1-9/32 to yield 4.69%. The dollar was mixed, rising against the yen, but slipping vs. the pound and the euro.

This article was written by a staff member of TheStreet.com.