Stocks finished mixed as the major indexes meandered in a tight price range Friday. The latest economic data, particularly a report that showed the economy grew a bit faster than the previous estimate in the fourth quarter, failed to inspire much direction.
The Dow Jones industrial average rose 3.7 points, or 0.03%, to 10,583.92. The broader Standard & Poor's 500-stock index was up 0.03 points at 1,144.94. The tech-heavy Nasdaq composite index fell 2.75 points, or 0.14%, to 2,029.82.
Among groups that make up the S&P 500 index, semiconductor-equipment and chip makers were the biggest losers. The biggest percentage gaining groups were home builders and casino and gaming stocks.
There is a heavy dose of economic reports coming next week. Starting off Monday are updates on personal income and spending, construction expenditures, and the Institute for Supply Management (ISM) manufacturing survey for February.
Auto makers will release February sales throughout the day Tuesday. Wednesday's releases include the ISM's survey on the services sector and the Federal Reserve's Beige Book. Thursday brings weekly jobless claims, fourth-quarter revised productivity, and January factory orders.
The key release is the employment report for February on Friday, Mar. 5. The median forecast from economists is for the unemployment rate to rise to 5.7%, from 5.6% in January, and for 110,000 new non-farm jobs to be added.
Next week's earnings calendar features a number of well known names, including Biogen Idec (BIIB), Costco Wholesale (COST), AutoZone (AZO), Toys R Us (TOY), and Staples (SPLS).
Wall Street ended the month of February in a narrowly mixed session, after investors choose to book earlier profits on an slightly better fourth-quarter gross domestic product gain and still healthy Chicago PMI for February.
gross domestic product growth for the fourth quarter of 2003 was 4.1%, vs. the 4.0% previous estimate. The number was higher than the consensus forecast, but shows a slowdown from the strong 8.2% pace in the third quarter. The growth in the fourth quarter came from personal consumption expenditures, exports, equipment and software, private inventory investment, and residential fixed investment, according to the Commerce Department.
The Chicago Purchasing Managers Index for February came in at 63.6, vs. 65.9 in January, and above the median estimate of 62.1. Notably, the employment index jumped to 54.8 from a prior 48.3, says economic research outfit Informa Global Markets.
In other economic news, the University of Michigan consumer sentiment index for late February was a touch firmer than expected, coming in at 94.4, vs. a prior reading of 93.1, and a median estimate of 93.5. The economic conditions index came in at 103.6, vs. a prior reading of 100.4, while the outlook index now stands at 88.5, vs. 88.4 at mid-month.
Among stocks in the news Friday, Martha Stewart Living Omnimedia (MSO) shares rose after the judge in the Martha Stewart trial dismissed the securities fraud charge against the lifestyle entrepreneur.
The Justice Department filed a lawsuit to block Oracle's (ORCL) $9.4 billion hostile bid for PeopleSoft (PSFT), saying a takeover would choke competition in the market for business-applications software.
In biotech, Genentech (DNA) was higher again after getting FDA approval late Thursday for its colon cancer drug Avastin.
Genzyme (GENZ) was lower after the company agreed to acquire Ilex Oncology (ILXO) for $26 per share, or about $1 billion in stock.
On the earnings front, Autodesk reported fouth-quarter earnings per share (GAAP basis) of 48 cents, vs. 6 cents a year ago, on a 51% revenue rise. The software maker sees first quarter EPS of 12 cents to 17 cents on $240 million to $250 million in revenue. It expects 94 cents to $1.04 in fiscal year 2005 EPS. The shares rose.
In retailing, Kohl's (KSS) shares rose after the company reported better than expected fourth-quarter EPS of 72 cents, vs. 81 cents a year ago, on 2.1% lower same-store sales and 12% higher total sales.
Gap (GPS) posted fourth-quarter earnings per share of 37 cents, meeting analysts' forecast, vs. 27 cents a year ago, on 3% higher same-store sales and 5% higher total sales. The apparel retailer says over the next 2 years, it expects it can achieve operating margins in the mid-teens.
SPX Corp. (SPW) shares plunged after the company reported fourth-quarter EPS from continuing operations of $1.30, vs. 99 cents a year ago, on a 10% revenue rise. The company reportedly sees $3.41 to $3.60 2004 EPS from continuing operations on total revenue growth of 5%. Goldman and Citigroup downgraded the stock.
Pride International (PDE) shares fell after the oil driller posted a fourth-quarter loss of 28 cents per share, vs. 1 cent EPS a year ago, as losses related to challenges encountered in construction of deepwater platform rigs offset a 25% revenue rise. Merrill downgraded the stock to neutral.
Treasuries opened firmer, pulled back on improving economic data, sat in a tight range into noon, and then popped higher on month-end buying, says Informa Global Markets. The yield on the benchmark 10-year note fell to 3.98%, as stocks wavered after the release of the economic data.
In currencies, the U.S. dollar lost ground against its major rivals as rumors spread that the European Central Bank won't cut its key interest rate at next week's policy meeting.
European stock markets finished mixed Friday.
London's Financial Times-Stock Exchange 100 index fell 23.7 points, or 0.52%, to 4,492.2 with help from some positive earnings reports, and an HSBC survey showing British consumers were willing to borrow more in February. BAE Systems was higher after the company posted the first profit in four years. Aviva was higher after posting strong second half earnings. The sterling was down at $1.8488 following reports that the Blair government is not overly concerned about the recent currency rise.
In Paris, the CAC 40 rose 10.95 points, or 0.29%, to 3,725.44 following news that French jobless rate fell to 9.6%, and January producer prices rose 0.3%.
Germany's DAX index was up 10.35 points, or 0.26%, to 4,018.16 on hopes that the European Central Bank will cut rates, even though a bank member played down the chances of that happening. The euro was down at $1.2386 as Schroeder meets with Bush in Washington to discuss the impact of recent dollar weakness.
Asian markets finished with strong gains Friday. In Japan, the Nikkei 225 index jumped 226.63 points, or 2.1%, to 11,041.92. Buying was inspired by news that Japan's manufacturers increased production at the fastest rate in four months. Additionally, January household spending rose for the first time in five months.
In Hong Kong, the Hang Seng index rose 232.39 points, or 1.7%, to 13,907.03.