Updated from 4:13 p.m. ESTStocks ended with gains Friday as the broad averages made it through higher bond yields and options-related volatility to finish a big week stronger. The Dow Jones Industrial Average rose 26.41 points, or 0.23%, to 11,279.65, and the S&P 500 added 1.92 points, or 0.15%, to 1307.25. The Nasdaq rose 6.92 points, or 0.3%, to 2306.48. James Park, managing director with Rodman & Renshaw, said it was a strange day for the markets. "With options expiration today, there was not as much volatility as we had expected," he said. "We were in range-bound trading." U.S. stocks ran to near five-year highs this week, buoyed by benign economic news and a string of solid brokerage reports. The Dow rose 1.8% this week, its second week of gains, while the S&P 500 added 2%. The Nasdaq gained 1.9%. "Because the longer-term trends all remain up, there are lots of support zones below current prices," said Ken Tower, chief market analyst with CyberTrader. "The big Nasdaq stocks have been the weak link in the rally, as demonstrated again yesterday by being the only major average to fall." About 2.01 billion shares traded on the New York Stock Exchange, with advancers beating decliners by a 6-to-5 margin. Trading volume on the Nasdaq was 2.56 billion shares, and winners edged losers 8 to 7. The 10-year Treasury bond, which rallied 22/32 Thursday, was off 7/32 in price to yield 4.67%. The dollar slipped against the yen and euro. Shares of Dow component Verizon ( VZ) were upgraded to outperform on Friday by Cowen & Co., which said the stock could outperform the broader market by as much as 20% over the next 12 months. Verizon lost 11 cents, or 0.3%, to close at $34.41. The Nasdaq turned positive for the session after the Philadelphia Semiconductor Sector index rebounded from early losses. The index, which lost 3.2% on Thursday, rose 0.1%. On the economic front, the University of Michigan's consumer sentiment index came in at a preliminary reading of 86.7 for March, unchanged from last month but below expectations of a rise to 88.0. Earlier, the Federal Reserve said industrial production rose 0.7% in February, matching estimates, while capacity utilization came in at 81.2%, slightly below expectations. Crude eased after rising almost 5% this week on concerns about U.S. military action in Iraq and the ongoing nuclear-research standoff in Iran. April crude ended the session down 81 cents to $62.77 a barrel. To view Gregg Greenberg's video take on today's market,
By sector, the Amex Oil index lost 1% after the decline in crude prices. The Amex Gold Bugs index gained 0.5%, the S&P Retail index was up 0.4%, and the Philadelphia/KBW Bank Sector index added 0.3%. Early headlines included a smattering of mergers news, including word that Vodafone ( VOD) plans to sell its Japan unit to Softbank for $14.9 billion. Another report in The Wall Street Journal says St. Paul Travelers ( STA) is discussing a possible merger with Zurich Financial. Vodafone lost 23 cents, or 1%, to $22.51. St. Paul Travelers was lower by $1.41, or 3.3%, to finish at $41.55. Late Thursday, American International Group ( AIG) said fourth-quarter profits plunged 72% from a year ago to $444 million, or 17 cents a share, due to a host of charges. Adjusted earnings of 14 cents a share missed estimates. AIG declined by 42 cents, or 0.6%, to $68.82. General Motors ( GM) saw pressure after saying its already massive loss for 2005 was $2 billion worse than previously believed. The automaker widened its full-year deficit to $10.6 billion after taking a bigger reserve against Delphi's bankruptcy and adding to a restructuring charge. GM dropped $1.09, or 4.9%, to $21.13.
The action came a day after Ford ( F) was downgraded at Citigroup on concerns about a weakening product mix. Ford shares still managed to end the day up about 1%. Ford gave up 12 cents, or 1.5%, to $7.81. Shares of Rambus ( RMBS) rose 5.6% after the company announced a license agreement with IBM ( IBM) for Cell Broadband Engine processors. Rambus was up $1.78 to close at $33.53. Among ratings moves, Jefferies downgraded Barnes & Noble ( BKS) to hold from buy, citing valuation. Shares of the retailer lost $1.30, or 2.7%, to $46.10. Four Seasons ( FS) also traded lower after J.P. Morgan downgraded the stock to underweight from neutral, citing delayed and canceled openings of new hotels. The stock fell $1.63, or 3.1%, to $50.83. Overseas markets were mostly higher, with London's FTSE 100 up 0.1% to 5999 and Germany's Xetra DAX losing 0.3% to 5882. In Asia, Japan's Nikkei rose 1.5% overnight to 16,340, and Hong Kong's Hang Seng added 0.5% to 15,602.