Stocks finished a rocky week on a mixed note. Cyclical stocks boosted the blue-chip Dow Jones industrial average on Friday -- but the Nasdaq index slid amid more disappointing earnings preannouncements in the tech sector. An encouraging economic report showing that more jobs were created in March than expected helped prop up the broader market.
The 30-stock Dow Jones industrial average gained 36.40 points, or 0.36%, to 10,271.64, led by diversified conglomerate Minnesota Mining & Manufacturing (MMM), which said its first-quarter profit will be at least at the high end of earlier expectations.
But negative earnings news from tech players weighed on the Nasdaq Composite index, which fell 19.72 points, or 1.10%, to 1,770.03. Computer storage network switches maker McData Corp. (MCDT) warned for the second time that it will see a wider-than-expected first-quarter loss. The company cited reduced orders from its largest customer, EMC (EMC).
The broader Standard & Poor's 500 index, meanwhile, lost 3.61 points, or 0.32%, to 1,122.73.
Wall Street was gearing up for next week's kickoff of the latest earnings reporting season, when companies begin releasing their first quarter results. Among the highlights, on Tuesday biotech firm Genentech (DNA) and drugmaker Abbott Laboratories (ABT) are expected to report their earnings.
On Wednesday, Internet media company Yahoo! (YHOO) steps up to the plate.
And on Thursday, watch for reports from Internet infrastructure company Juniper Networks (JNPR) and payment services giant First Data (FDC).
Investors will also get a heavy dose of economic data next week. The key reports are due out Friday when U.S. retail sales for March are set to be released. Analysts are expecting a 0.5% increase vs. a 0.3% increase in the previous month.
Also expected Friday is the March producer price index (PPI), a gauge of inflation at the wholesale level. The PPI is expected to rise 0.8% after a 0.2% increase in the previous month, and the core rate should remain unchanged once volatile food and energy prices are stripped out.
Lastly, the preliminary reading for the University of Michigan's consumer sentiment index for April is due out Friday. The consensus forecast is a rise to 96.5 from 95.7 last month.
Other reports include U.S. wholesale inventories and sales, due out on Monday, which are expected to fall 1% and rise 0.3%, respectively. On Wednesday, initial jobless claims for the previous week are expected to fall to 420,000 from 460,000.
In Friday's session, investors continued to focus on corporate accounting issues. Qwest Communications (Q), a large telecommunication services company, said the Securities and Exchange Commission is conducting a formal probe of its accounting practices.
And Alcoa Inc. (AA), another Dow component and the world's largest aluminum company, posted 46% lower first-quarter profit as slumping demand reduced aluminum prices and shipments.
In economic news, the Labor Department reported that U.S. nonfarm payrolls rose 58,000 in March after a downwardly revised drop of 2,000 in February (from a previously reported gain of 66,000). The nation's unemployment rate, as expected, ticked up to 5.7% from 5.5% in the previous month. Still it was lower than the 6 1/2-year high of 5.8% recorded in December. And economists expect the Federal Reserve to hold off on raising interest rates until the unemployment rate recedes.
S&P says the dichotomy between the improving trend in payrolls and the rise in the unemployment rate highlights an important point -- that the payroll gain still is not enough to offset the structural growth of the labor market.
Wall Street was also encouraged Friday by President George W. Bush's increasing involvement in trying to find a way to end the fighting between Israel and the Palestinians. There are concerns that the escalating violence in the Middle East could disrupt world oil supplies, a move that could hamper economic recovery.
Treasuries closed higher in price. S&P MMS notes that the break of key technical levels, along with the mixed showing in equities, helped boost bonds. Also, traders seem unwilling to be short the market into the weekend, given the risky Middle East situation. Bonds initially spiked higher following the payroll report, given that the data will not force the Federal Reserve's hand on an interest rate decision as soon as the May 7 FOMC meeting.
Europe markets ended mixed. In London, the FTSE 100 index was up 24.10 points, or 0.46%, at 5,233.60 following an OECD report that said UK leading economic indicators improved in February. Another report showed that UK full time job placements increased in March.
In Paris, the CAC 40 index was off 22.61 points, or 0.50%, at 4,515.70.
In Frankfurt, the DAX index was up 5.58 points, or 0.11%, to 5,260.53 after factory orders unexpectedly fell 1.0% in February. The OECD report said German leading indicators fell in February.
Asian markets closed with losses. In Tokyo, Japan's benchmark Nikkei 225 index closed off 43.71 points, or 0.38%, at 11,335.49 pressured by shares of exporters on weak US economic
data and the strong yen, plus losses in the NTT companies after downward revisions to earnings forecasts.
Hong Kong's stock market was closed on Friday in observance of the Ching Ming Festival.