Stocks finished higher Friday on a late-afternoon rebound, led by advances in Microsoft (MSFT ) and General Electric (GE ).
Semiconductor and technology shares boosted the Nasdaq, while the Dow posted a solid double-digit gain in about the last hour of the session.
A positive outlook from McDonald's Corp. (MCD ) also beefed up the Dow and sparked a rally in restaurant shares. The world's largest fast-food chain predicted growth in 2002.
Investors were sidelined for most of the day as the market struggled to find direction. Not even a positive forecast from software giant Oracle (ORCL ) could prop up the major indexes in the early going. Oracle said earnings should be flat with the year-ago period at $0.10 per share -- the current consensus is $0.11 -- and it indicated that it believes its business hit bottom in its just-reported second quarter.
Investors remain worried about earnings and the timing of a U.S. economic recovery. Weak pricing power and excess global capacity are raising doubts about the quality of a rebound in corporate profits next year after a projected 28% year-over-year fall in 2001.
Among other stocks in the news Friday, Calpine (CPN ) shares and bonds fell after Moody's Investors Service said it may cut the California-based power producer's debt rating to "junk" status.
Amgen (AMGN ) fell after Bank of America says although the acquisition of Immunex makes some strategic sense, the purchase is dilutive and shifts Amgen's focus away from the launch of Aranesp, its anemia treatment
Pharmacyclics (PCYC ) plunged after saying its key clinical objectives for its lead product for brain metastases, Xcytrin Injection, were not met. USB Piper, JP Morgan and Adams Harkness downgraded the stock.
The Dow Jones industrial average rose 44.70 points, or 0.46%, to 9,811.15. The tech-heavy Nasdaq composite index added 6.66 points, or 0.34%, to 1,953.17. The broader S&P 500 index rose 3.69 points, or 0.33%, to 1,123.07.
Looking ahead to next week, Monday is expected to bring the release of the National Association of Homebuilders' December housing market index, which measures confidence in housing market activity. The index recovered a bit in November, helped by declining mortgage rates.
Tuesday brings housing starts for November, with Standard & Poor's MMS predicting a decline to a 1.54 million annual pace. On Wednesday, the October trade report is due, with S&P's MSS seeing a sharper decline to $27.5 billion from $18.7 billion drop in September.
The Philadelphia Fed index is due on Thursday, while Friday will see final third-quarter gross domestic product and personal income data for November. MMS expects a 1% drop in GDP, and a 0.2% drop in November personal income, vs. an unchanged rate in October.
Looking ahead to corporate earnings, Circuit City Stores (CC ), 3Com (COMS ), Morgan Stanley Dean Witter (MDW ), FedEx (FDX ) and Palm (PALM ) all will release quarterly results. Intel (INTC ) will host a technology conference.
Treasuries ended lower. The decline in business inventories and smaller-than-expected contraction in industrial production cast a pall on Treasuries. Weakness in stocks held losses in check for some of the session, but the late equity rebound torpedoed shorter-dated issues.
European markets finished lower. In London, the Financial Times-Stock Exchange 100 index fell 13.90 points, or 0.27%, to close at 5,061.00. The biggest contributors to the decline included GlaxoSmithKline, BP-Amoco and Diageo. In France, the CAC 40 lost 70.64 points, or 1.60%, to close at 4,340.02. In Germany, the DAX Index dropped 39.28 points, or 0.79%, to 4,926.77, led by losses in Deutsche Telecom, Allianz and Seimens.
In Asia, the markets finished mixed. Japan's Nikkei added 78.20 points, or 0.75%, to 10,511.65, in a modest rebound from Thursday's sell-off, its worst one-day decline since Sept. 17. Still, decliners beat gainers by 1,065 to 347. In Hong Kong, the market lost 63.43 points, or 0.55%, to 11,466.11.