Major indexes finished modestly higher after light trading Thursday before the holiday weekend. Short-covering helped offset a rise in the 10-year Treasury yield above 5%, says Standard & Poor's MarketScope.
The Dow Jones industrial average edged up 7.68 points, or 0.07%, to 11,137.65, gaining 0.2% on the week. The broader Standard & Poor's 500 index rose 1 point, or 0.08%, to 1,289.12, ending the week down 0.5%. The tech-heavy Nasdaq composite gained 11.43 points, or 0.49%, to 2,326.11, for a weekly loss of 0.6%.
The steepening Treasury yield curve reflects new expectations the Federal Reserve will keep raising interest rates to 5.25%, some analysts say. "The bond market is starting to anticipate a more aggressive Fed," says Bill Larkin, portfolio manager of fixed income at Cabot Money Management. "The Fed has two problems. One, employment is not weakening. Two, higher energy costs look like they're chronic."
Markets will be closed for the Good Friday holiday. The Fed will be open and is set to release industrial production and capacity utilization data for March.
Next week holds March consumer and producer prices, housing starts data and April regional factory activity surveys. Monday kicks off with the housing market index and the Empire State manufacturing survey. A heavy stream of earnings reports should also keep investors occupied.
Investors were weighing another set of economic data Thursday. Retail sales rose by 0.6% in March, stronger than expected, says Action Economics. Import prices fell 0.4% for the month, while export prices rose 0.2%. Jobless claims rose 12,000 to 313,000 for the week ended Apr. 8, slightly higher than expected.
Meanwhile, the University of Michigan's preliminary reading on April consumer sentiment rose slightly to 89.2, in line with expectations. Business inventories were unchanged in February.
An industrial bellwether turned in solid earnings. General Electric (GE) was lower after the company said its first-quarter profit rose 14%, matching analysts' estimates.
Some newspaper publishers were also releasing quarterly results. The New York Times (NYT) reported first-quarter diluted earnings per share of 24 cents, down from 76 cents a year earlier. Tribune (TRB) posted a 28.5% first-quarter profit decline.
Chipmaker Advanced Micro Devices (AMD) posted higher first-quarter earnings, but shares fell after the company said revenue this quarter may fall below analysts' estimates.
Elsewhere, Internet search company Google (GOOG) was lower on a report it may buy companies in China to catch up with Baidu.com (BIDU) in the world's second-largest online market.
Software giant Microsoft (MSFT) also dipped slightly after the company and Chinese computer maker Founder Technology Group agreed to buy $250 million of Windows software over the next three years as part of efforts to curb piracy.
A maker of flash memory cards, SanDisk (SNDK), was higher after S&P said it will replace Chiron (CHIR) in the S&P 500 index after Apr. 19.
Automaker Ford (F) was higher as the company said it would close plants in Minnesota and Virginia, which employ 4,300 people, in 2008.
Pfizer (PFE) was modestly higher as the drugmaker agreed to settle a patent dispute with Schwarz Pharma AG.
In the energy markets Thursday, May West Texas Intermediate crude oil futures closed up 73 cents at $69.35 a barrel.
European markets finished higher. In London, the Financial Times-Stock Exchange 100 index rose 28.6 points, or 0.48%, to 6,029.4. Germany's DAX index was up 17.32 points, or 0.29%, to 5,918.57. In Paris, the CAC 40 index added 17.51 points, or 0.34%, to 5,102.62.
Asian markets finished higher. Japan's Nikkei 225 index rose 36.6 points, or 0.21%, to 17,199.15. In Hong Kong, the Hang Seng index added 118.69 points, or 0.73%, to 16,429.45. Korea's Kospi index bounced 22.13 points, or 1.6%, to 1,405.72.
Prices for 10-year Treasury notes were lower at 95-26/32 with a yield of 5.04%, while 30-year bonds fell to 90-23/32 for a yield of 5.11%.