Stocks Friday finished with gains as the market shook off a profit warning from Alcoa (AA), the world's largest aluminum producer, and cheered a pullback in oil prices and solid economic reports.
The Dow Jones industrial average added 23.97 points, or 0.23%, to 10,313.07. The broader Standard & Poor's 500 index was up 5.54 points, or 0.5%, to 1,123.92. The Nasdaq composite index gained 24.66 points, or 1.32%, to 1,894.31.
Looking ahead to next week, economic data are scarce Monday. Tuesday brings August retail sales. On Wednesday, investors get an update on business inventories in July and August industrial production. Thursday holds more jobless claims data, August consumer price index and the September Philadelphia Fed. A preliminary read on September University of Michigan consumer sentiment is due Friday.
Earnings updates next week are expected from Campbell Soup (CPB), Best Buy (BBY), Circuit City (CC), Kroger (KR), Oracle (ORCL), BioMet (BMET), and Tektronix (TEK).
On Friday, the blue chips were pressured by Dow industrials member Alcoa, which said plant closures, restructuring costs, and weakness in certain markets could dent third-quarter profits by as much as 42%. Alcoa shares were 8.3% lower.
Also disappointing Wall Street was auto parts supplier Visteon (VC), which warned that its second-half results will be well below prior forecasts. Shares were 13% lower.
In technology, Electronic Data Systems (EDS) moved higher after saying it would move to slash as many as 20,000 jobs over the next two years as part of a plan to cut some $3 billion in costs.
The Nasdaq pressed higher after news that a federal judge has rejected the government's attempt to block database software company Oracle's proposed acquisition of PeopleSoft (PSFT). Shares of both PeopleSoft and Oracle rose on the news, with PeopleSoft 11% higher.
Economic news was mostly helpful to stocks. The headline producer price index (PPI) -- a gauge of inflation at the wholesale level -- dipped 0.1% from July against consensus view for a 0.2% rise, according to Informal Global Markets. The core PPI -- which strips out volatile food and energy prices -- also fell 0.1% on the month, with the month annualized rate slowing to only 0.5% from 2.4% before. The core PPI is up 1.5% year-over-year, also easing from the prior report.
"This is much tamer than expectations and supports the Fed's gradual bias to tighten policy," Informa says.
In other stocks news, entertainment outfit Walt Disney (DIS) said Michael Eisner, its chief executive, plans to step down when his contract expires in September, 2006.
Crude oil prices on the Nymex plunged on Friday, falling $1.80 to $42.81 per barrel on profit taking before the weekend. Also, weather maps suggest Hurricane Ivan might not make full fledged assault on the Gulf of Mexico, as had been feared.
In other economics news, the U.S. trade deficit fell slightly in July to $50.15 billion, down from $55.02 billion in the previous month.
Treasuries finished modestly higher Friday in a see-saw session. Action Economics reports that the 10-year yield tumbled to 4.13% on the PPI report, but soon rebounded to 4.16% as long-standing bears stepped back in and the rally faded. Rates moved back nearly to opening levels around 4.18% on relatively hawkish words from Cleveland Fed President Pianalto, notes Action.
European stocks finished higher on Friday. The Financial Times-Stock Exchange 100 index in London was up 7 points, or 0.15%, to 4,545, on short covering before the weekend. Sainsbury was higher even though some analysts scotched speculation Target might make a takeover bid. Abbey National was higher as Santander Central Hispano reiterated it expects to complete its 8.7 billion-pound purchase of Abbey in November. AstraZeneca was lower as the U.S. FDA said the company might need to provide more data to prove its experimental blood thinner Exanta is safe and effective.
Germany's DAX index added 34.81 points, or 0.90%, to 3,886.03. Infineon Technologies and Siemens were higher after Texas Instruments CEO said he's optimistic about demand for his company's semiconductors. SAP was up in sympathy with news Oracle won court permission to proceed with hostile bid for PeopleSoft.
In Paris, the CAC 40 index advanced 25.59 points, or 0.70%, to 3,677.61, as the French trade deficit narrowed last month. STMicroelectronics was higher in reaction to Texas Instruments' bullish semiconductor demand outlook. Alcatel was higher after it got orders to supply mobile phone network in Libya and a satellite based broad band network in Tunisia.
Asian markets finished mixed on Friday. Japan's Nikkei 225 index lost 87.73 points, or 0.79%, to close at 11,083.23 after the country's April-June gross domestic product was revised down, surprising the market. April-June GDP grew an annualized 1.3%, compared with its preliminary estimate of 1.7%. Large caps slid following the announcement, with NTT sinking 2.32% while Nippon Steel edged down 1.92%. UFJ Holdings plummeted almost 4% after reports said a planned merger with Mitsubishi Tokyo Financial Group may face more hurdles than expected.
In Hong Kong, the Hang Seng index gained 61.79 points, or 0.48%, to close at 13,003.99 on weakened sentiment in the wake of rising oil prices and Thursday's bomb attack in Jakarta on the Australian embassy.