Updated from 1:16p.m.
Stocks closed mixed Friday in post-Thanksgiving volume, but broke a two-week losing streak, as the dollar's descent to a record low against the euro prevented a meaningful advance. The S&P closed just below its 17-month closing high of 1059.02 set on Nov. 3, after breaching that level intraday.
Dow Jones Industrial Average
rose 2.89, or 0.03%, to 9782.46, for its fifth-straight gain, the
declined 0.25 points, or 0.02%, to 1058.20, and the
gained 6.95 points, or 0.4%, to 1960.26.
Trading was thin on this Black Friday, with no earnings or economic releases on the calendar and many traders taking off the half day of trading. About 485.7 million shares traded on the
New York Stock Exchange
and 689.1 million shares exchanged hands on the Nasdaq.
The Dow gained 1.7% on the week, the S&P rose 2.2% and the Nasdaq bounced 3.5%. Stocks finished higher for the first week in three.
"Market action over these past few days is not likely to be indicative of what's going to happen next week," said Robert Pavlik, portfolio manager at OakTree Asset Management. "I am confident that the market will find support next week and potentially more upside, as investors return from holiday and focus on the recent batch of strong economic figures."
While Friday is traditionally a busy Christmas shopping day, the market's attention was focused on the dollar, which fell below the $1.20 level against the euro for the first time. Concern about the
low interest rate policy and its affect on foreign investment was the main culprit. Furthermore, the burgeoning U.S. current account and budget deficits continue to weigh on the dollar.
In late New York trading, the euro fetched $1.1992, and the dollar was slightly stronger vs. the Japanese yen.
The 10-year Treasury note fell 20/32 to yield 4.32%. Currency analysts are concerned that low yields on Treasuries are diverting foreign fixed-income flows toward higher-yielding government bond markets, including those in the U.K., Germany and Australia.
While the dollar's recent push weaker has been dramatic, strategists and investors have been pointing fingers at a lineup of the usual suspects. The ever growing current account and budget deficits are old news, and the 10-year U.S. Treasury yield has been trading below 5% since June 2002, and is well off its historical low of 3.114% set in June 2003.
So what has been the real impetus for the recent dollar collapse?
Clearly, the current account deficit is the biggest dollar negative out there, said Lisa Finstrom, senior currency analyst at Citigroup. "However, the near-term spark has been increased terror activity and escalating trade tensions."
Finstrom is surprised that low Treasury yields have overshadowed the potential growth differential between the U.S. and Europe that the highly accommodative stance of Fed policy has begun to spur. Not to mention, the European Central Bank's efforts to reinflate the European economy have been hampered by monetary and fiscal ceilings on inflation and deficits.
In corporate news,
is reporting that a venture fund run by
has offered to spend $430 million to buy the system integrated circuit business of
, the world's third-largest maker of memory chips. The operations make up about one-fifth of Hynix's business. Citigroup shares rose 16 cents, or 0.3%, to $47.11.
J.P. Morgan raised its 52-week price target on
to $75 from $65, and maintained an overweight rating on the sneaker maker. The company's shares improved 2 cents, or 0.03%, to $67.37.
has signed a $600 million contract with the Bank of Ireland to manage the bank's entire IT infrastructure. H-P shares fell 16 cents, or 0.7%, to $21.70.
Johnson & Johnson
is suspending trials of an anemia drug that was being tested on cancer patients to aid radiation and chemotherapy treatments. J&J shares dipped 22 cents, or 0.4%, to $49.48.
shares advanced 19 cents, or 0.4%, to $48.15, despite losing a major contract with the
sandwich chain to rival
. Its shares dipped 8 cents, 0.2%, to $46.61.
shares surged $4.75, or 18.8%, to $30, on optimism about its Federal Trade Commission patent dispute.
Foreign markets finished mixed, with London's FTSE 100 off 0.4% to 4343 and Germany's Xetra DAX up 0.03% to 3746. In Asia, the Nikkei closed down 0.6% to 10,100, while Hong Kong's Hang Seng added 2% to 12,317.
On the calendar for next week, the Institute for Supply Management will release its manufacturing and services indexes. Manufacturing has shown continued strength at the regional level. Investors will be watching closely to see if this can translate to the national level.
In addition, the November labor report will be released on Friday. The unemployment rate is expected to hold steady at 6.0%, and nonfarm payrolls are expected to increase by 150,000 after growing 126,000 in October. October's increase was a dramatic surprise, but did not have much market impact.
"Many people think that most of the good news is already priced in," said Pavlik. "But if we continue to get positive news, I believe it will raise the upside on stocks."