Indexes spun their wheels Friday amid mixed earnings from marquee names. Next week brings more profit reports and testimony from Bernanke
U.S. stock indexes finished flat Friday amid a mixed bag of corporate earnings. IBM Corp.'s (IBM). earnings provided a boost to the Dow industrials, but results from Citigroup (C), Bank of America's (BAC), and General Electric Co.'s (GE)
failed to impress the Street.
Some traders were encouraged by a report that Goldman Sachs Group (GS) and JPMorgan Chase & Co. (JPM) might aid ailing commercial lender CIT Group (CIT).
There was little reaction to a report June housing starts unexpectedly rose 3.6% after surging 17.3% in May. Building Permits rose 8.7%, more than expected.
On Friday, the 30-stock Dow Jones industrial average finished higher by 32.12 points, or 0.37%, at 8,743.94.
The broad Standard & Poor's 500-stock index was down 0.36 points, or 0.04%, at 940.38.
The tech-heavy Nasdaq composite index inched up 1.58 points, or 0.08%, to 1,886.61.
Treasuries were solidly lower in price. The dollar index was higher. Gold futures were higher in a reversal of earlier losses, as were oil futures.
Looking ahead to next week, the barrage of corporate earnings releases will continue. The economic data calendar is light, with reports due on leading indicators, existing home sales, jobless claims, and consumer sentiment. That will leave the focus squarely on Federal Reserve Chairman Ben Bernanke's semi-annual monetary policy testimony before the House Financial Services Committee on Tuesday and the Senate Banking Committee on Wednesday.
Bernanke is likely to strike a careful balance between "green shoots" and "yellow weeds" on the recovery, while keeping options open on emergency liquidity measures and retaining commitment to the "extended period" policy rhetoric for now, notes Action Economics.
In earnings news Friday, Bank of America's earnings declined less than expected, to a still hefty $3.2 billion. Citigroup revealed a $4.3 billion quarterly profit, but only after a large one-time gain from the sale of a majority stake in its Smith Barney unit.
General Electric Co.'s (GE) quarterly profit plunged 47%, although it beat Wall Street expectations.
In technology, IBM was higher after reporting a 12% increase in earnings and raising its forecast. And Google (GOOG) beat earnings expectations, but disappointed investors with its revenue growth.
The All Things Digital (ATD) blog from Dow Jones is reporting an unconfirmed story that a Yahoo (YHOO) search and online advertising pact with Microsoft (MSFT) is close and simply "down to the short strokes."
CIT said Friday its directors and management, in consultation with their advisors, are continuing to evaluate alternatives to improve the company's liquidity. The company said it is in discussions with potential lenders to secure financing.
Deadly terrorist bombings in Jakarta were weighing on some markets Friday, according to S&P MarketScope.
Meanwhile, NYU economist Nouriel Roubini sought to downplay his comments on Thursday, reiterating his cautious assessment on the U.S. outlook, including below potential growth beginning next year and risk of a double dip W-shaped recession toward the end of 2010.
In economic news Friday, U.S. housing starts rose 3.6% in June to a 0.582 million unit annual pace, from an upwardly revised 0.562 million previously (was 0.532 million). April's 0.454 million was revised up to 0.479 million as well.
The housing starts report extended the string of upside surprises in recent factory sentiment, claims, and inflation reports to the housing sector as well, notes Action Economics. "The recent string of good news has taken some of the edge off the weak U.S. jobs report at the start of the month that poisoned the market's view of the remaining June data."