Stocks Stall Late, Close Mixed
Updated from 4:07 p.m. EDT
Stocks closed well below their session highs Friday as the optimism stemming from a wave of solid economic reports and chatter about a high-profile pharmaceuticals merger died down late in the day.
The
Dow Jones Industrial Average gained 13.56 points, or 0.1%, to 9925.25. The
Nasdaq lost 16.19 points, or 1%, to 1615.73, and the
S&P 500 added 2.48 points, or 0.2%, to 1067.14. The Dow traded as high as 10,042, and the Nasdaq touched 1651 during the session.
Consumer sentiment reached its highest level in a year and a half, according to the latest survey by the University of Michigan. The Michigan
consumer sentiment index rose to 96.9 in May from 93 in April, edging past analysts' estimates and topping the preliminary reading of 96.
Separately, the
Chicago purchasing managers' index showed that manufacturing activity in the Midwest grew for the fourth straight month. The Chicago PMI came in at 60.8 in May, up from 54.7 in April and well ahead of expectations.
Elsewhere,
factory orders in April rose 1.2%, according to the Commerce Department. Analysts were looking for a 0.7% increase. New orders for durable goods rose 1.5%. Additionally, the Labor Department said
nonfarm productivity rose 8.4% in the first quarter, matching the forecast of economists polled by
Reuters
and representing the biggest gain since the second quarter of 1983. Unit labor costs dropped 5.2%.
On the corporate news front, a report said
GlaxoSmithKline
(GSK) - Get Report
and
Bristol-Myers Squibb
(BMY) - Get Report
have held preliminary merger discussions, although one executive put the chances of a deal at less than 50%. Bristol-Myers rose 4.3% to $31.12, while Glaxo fell 3.1% to $40.75.
Handheld computer maker
Palm
(PALM)
said after the close Thursday that fourth-quarter sales would come in well below expectations as consumer demand in the spring quarter failed to materialize. The company also warned that it would not turn an operating profit until late 2002.
Shares of Palm finished down 28% to $1.59. Handheld device maker
Handspring
(HAND)
dropped 13%.
Fast-food restaurant chain
Wendy's
(WEN) - Get Report
laid out plans to acquire Fresh Enterprises for $275 million. Fresh Enterprises operates 169 Baja Fresh Mexican Grill eateries nationwide. Shares of Wendy's climbed 5.5% to $37.97 on the news.
The equity of
Adelphia Communications
(ADLAE)
was on its last legs following word the company will probably be
delisted from the Nasdaq on Monday. The Nasdaq's decision could force the troubled cable company to make huge payments to bondholders and possibly speed a bankruptcy filing. The stock slid 46 cents, or 40%, to 70 cents.
U.S. Treasuries were lower across the board around 4 p.m. EDT. The 10-year note was down 6/32 to 98 23/32, yielding 5.04%, while the 30-year bond was the weakest issue.
European markets were higher. London's FTSE 100 rose 0.9% to 5085, and Germany's Xetra DAX gained 1.2% to 4818. In Asia, Japan's Nikkei 225 fell 0.1% to 11,764, while Hong Kong's Hang Seng lost 0.7% to 11,302.
