Stocks Finish Flat After South Korea Scare, GDP Revision
NEW YORK (
) -- Stocks closed near the flat line Friday after reports of a possible attack on one of the South Korea's naval ships surfaced and after the government revised lower its latest assessment of fourth-quarter economic growth.
Initial reports about a sunken South Korean naval ship mentioned the possibility that it had been hit by a North Korean torpedo, according to
Reuters
, which quoted a South Korean media report. Later reports, however, said such an attack was unlikely, which helped pare losses in the afternoon.
The
Dow Jones Industrial Average
added 9 points, or 0.1%, to 10,850. The
S&P 500
gained 1 point, or 0.1%, to 1167, and the
Nasdaq
fell by 2 points, or 0.1%, to 2395.
On a listless day for stocks, the Dow still managed to move 1% higher for the week. The S&P added 0.6% since last Friday's close, as the Nasdaq went higher by 0.9%.
Despite the midsession weakness, Linda Duessel, equity market strategist at Federated Investors, is very bullish on the market going forward, particularly because markets only moved higher on the passage of landmark health care reform.
"We were just hoping that the S&P 500 would hold its support at 1150 and we did better than that. We got new highs this week," Duessel said, adding, "I think it's a very bullish sign."
"From a technical point of view, it's really 'all clear' from 1150 to the 1250/1300 range, which is where we were on the Friday before Lehman filed
for bankruptcy protection," Duessel said. "Plus, there's probably a little performance anxiety among portfolio managers as we approach the end of the quarter. And with inflation under control, the Fed saying rates are going to stay low for an extended period, first-quarter earnings coming up and estimates being raised, it's not that hard to be bullish right now."
Earlier, the third and final read on
fourth-quarter gross domestic product was lower than economists expected at 5.6%.
Meanwhile,
March consumer sentiment, as measured by the University of Michigan's Surveys of Consumers, was unchanged from February's level of 73.6.
Shifting political winds found their way to Iraq today. According to
The Wall Street Journal,
preliminary election results announced Friday showed former secular Prime Minister Ayad Allawi's camp squeaked past current Prime Minister Nouri al-Maliki's circle, giving it the presumptive first crack to form a coalition.
In Washington, the Obama administration introduced new measures to address continued weakness in the U.S. housing market. The new measures, which are funded through the government's Troubled Asset Relief Program, will allow for the reduction of some mortgage debt, increase refinancing options and offer incentives for paying down mortgage debt.
The U.S. House of Representatives passed the package of changes to the health care overhaul bill that President Obama signed into law earlier this week, wrapping up the administration's yearlong to reform the U.S. health care system.
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The Economy
Aloca
(BAC) - Get Report
was the Dow's best performer, followed by
Bank of America
(BAC) - Get Report
and
Chevron
(CVX) - Get Report
.
Bank of America gained on its recently announced plan to forgive up to 30% of loan principal on some of its most troubled loans. The stock added 16 cents, or 0.9%, to $17.90.
Pfizer
(PFE) - Get Report
,
Microsoft
(MSFT) - Get Report
and
Merck
(MRK) - Get Report
were the Dow's biggest laggards.
Trading in the Dow was light at 175.4 million, compared with an average of 200.4 million.
Economic data provided a mixed read on the economy as the Commerce Department gave mildly disappointing news with a downward revision to its third and final reading on fourth-quarter GDP. The department said economic activity grew 5.6% in the fourth quarter, down from a previous reading of 5.9% growth. Economists had expected growth to hold at 5.9%.
The University of Michigan Consumer Sentiment Index came in slightly better than expected with a final level of 73.6 for March. The reading showed no change from February's level but beat economists' expectations for a reading of 73.
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Company News
Oracle
(ORCL) - Get Report
reported better-than-expected third-quarter earnings and higher sales from new software licenses. Shares, however, lost 35 cents, or 1.3%, to $25.69.
Shares of
Ambac Financial Group
(ABK)
plummeted 21.3% after news that it has provisional agreements to settle $16.7 billion in debt.
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Commodities and the Dollar
Crude oil for May delivery settled 53 cents lower to $80 a barrel while the April
gold contract gained $11.40, or 1%, on geopolitical fears related to the South Korean naval boat. The contract settled near session highs at $1,104.30 an ounce.
The dollar was trading lower against a basket of currencies, with the dollar index down by 0.5%.
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Treasuries
The benchmark 10-year Treasury strengthened 7/32, dropping the yield to 3.855%.
The two-year note gained 2/32, lowering the yield to 1.055%. The 30-year bond rose 7/32, diluting the yield to 4.748%.
--Written by Melinda Peer and Sung Moss in New York
.
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