Advertisement
YOU ARE HERE: LAT HomeCollections

Rocky week ends on up note

July 26, 2008|Tim Paradis | The Associated Press

Wall Street ended a volatile week with uneven gains Friday after better-than-expected economic data placated a market pummeled a day earlier by concerns about housing and the financial sector.

Financials drifted lower on continued worries about the health of balance sheets, while a surge in profits at Juniper Networks lifted technology stocks.

The Commerce Department reported that orders sent to factories for big-ticket manufactured goods such as cars, appliances and machinery rose 0.8% in June, the strongest gain in four months and well ahead of Wall Street's expectations.

Another Commerce Department report showed that new home sales dropped by a smaller-than-expected 0.6% in June. While it marked the seventh decline in the last eight months, it stirred some hope that the housing market could be finding a bottom.

And there was good news about consumers, whose reluctance to spend has troubled Wall Street because consumer spending accounts for more than two-thirds of U.S. economic activity. The Reuters/University of Michigan index of consumer sentiment for the first part of July came in at 61.2. The report marked a slight rebound from a 28-year low last month.

Linda Duessel, equity market strategist at Federated Investors, said economic figures such as the durable goods numbers were important because they revealed continued demand from abroad, which could help U.S. companies continue to post profits even if the U.S. economy weren't running at full steam.

The Dow Jones industrial average rose 21.41 points, or 0.2%, to 11,370.69. The Dow, which fluctuated Friday, fell more than 280 points Thursday.

Broader stock indicators also rose. The Standard & Poor's 500 index advanced 5.22 points, or 0.4%, to 1,257.76, and the technology-heavy Nasdaq composite index jumped 30.42 points, or 1.3%, to 2,310.53.

The Russell 2000 index of smaller companies rose 7.95 points, or 1.1%, to 710.34.

For the week, the Dow fell 1.1% and the S&P 500 lost 0.2%. Friday's tech rally left the Nasdaq up 1.2% for the week.

Bond prices moved lower as investors shifted back into stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.1% from 4% from late Thursday.

The dollar was mixed against other major currencies, while gold prices rose.

A barrel of light sweet crude fell $2.23 to $123.26 on the New York Mercantile Exchange. Oil prices have fallen more than $20 in recent weeks, alleviating some of Wall Street's concerns about the effect of inflation on consumers' ability to spend.

Many financial stocks fell again Friday as investors worried about the health of their balance sheets given the weakness in the housing sector. Bank of America fell $1.06, or 3.5%, to $29.58, while Wachovia fell $1.19, or 7.6%, to $14.50.

Juniper Networks, the maker of networking equipment, reported a 40% increase in earnings for the second quarter, helped by a new product line. The stock surged $4, or 18%, to $26.57.

Advertisement
Los Angeles Times Articles
|
|
|