Stocks ended lower on Friday as investors fretted over signs of consumer inflation and disappointing news from computer giant Hewlett-Packard (HPQ ).
The Dow Jones industrial average lost 45.70 points, or 0.43%, to 10,619.03. The broader Standard & Poor's 500-stock index eased 2.95 points, or 0.26%, to 1,144.11. The tech-heavy Nasdaq composite index lost 8.03 points, or 0.39%, to 2,037.93.
By late afternoon Friday, traders were already turning their attention to next week when more earnings and economic reports are due out.
As far as the earnings calendar, Monday brings reports from Campbell Soup (CPB ) and networking solutions company Novell (NOVL ). On Tuesday, home improvement retailer Home Depot (HD ) and media company Clear Channel Communications (CCU ) are scheduled to report. On Wendesday, comes jewelry retailer Tiffany (TIF ). Restaurant chain IHOP (IHP ) is set to report on Thursday followed by Introgen Therapeutics (INGN ) on Friday.
The economics news will be heavy. On Tuesday, closely watched consumer confidence figures for the month of February will be released. The gauge is seen ticking up to 97 from 96.8 in the previous period, according to Informa Gloabl Markets, the economic research firm. On the same day, a report on sales of existing homes in January is seen slowing to a 6.25 million annualized pace from 6.47 million in the previous month. And orders for big ticket items in Janaury are expected to increase 0.5% from 0.3% in the previous month.
On Thursday, a report on new home sales in January is seen easing to a 1 million annualized pace from 1.06 million in December. And preliminary gross domestic product figures for the fourth quarter of 2003 are expected to show the economy grew 4.1% vs. 4.0% in previous estimates.
On Friday, H-P posted 30% higher quarterly profit and stated it was on track to meet expectations for the current quarter. Yet Wall Street was upset by slower growth in the outfit's printer and imaging unit, where it derives a lot of profit.
In economics news, inflation at the consumer level jumped by a greater-than-expected 0.5% in January, which was the largest rise in nearly a year. Excluding volatile food and energy costs, the Consumer Price Index (CPI) rose only 0.2%. Last month the core CPI rose only 0.1%.
In other equities news, department-store operator Nordstrom (JWN ) reported better than expected fiscal fourth quarter earnings of 74 cents per share, vs. 44 cents one year earlier on 8.5% higher same-store sales and 12% higher total sales.
BEA Systems (BEAS ), which makes software for busienss, posted higher quarterly profit and revenue rose thanks to sales of software used to build Web-based programs.
Hormel Foods (HRL ) posted 10% higher in the latest quarter, thanks to strong demand for its pork and turkey products.
Executive search firm Heidrick & Struggles (HSII ) posted a wider net loss mainly because of restructuring and tax-related charges.
Treasuries ended lower on Friday as the dollar rose sharply against the yen after Japan raised its terror alert to its highest level. The higher greenback means the Bank of Japan is now less likely to want to intervene in foreign exchange market to support the dollar and use the proceeds to buy U.S. Treasuries and other assets, says Standard & Poor's MarketScope. The higher-than-expected CPI reading weighed on the market as well, as it suggests that the Federal Reserve may act sooner rather than later to tame the threat of inflation.
But William Poole, St. Louis Fed President, said on Friday that he sees the economic outlook as quite promising and that it's too soon to know when the Fed may have to raise rates, according to MMS Internataional, the economic research firm. He also said that he anticipates new jobs being added at a faster pace than in the latest five months, which have been marked by disappointing job growth figures.
European stock markets closed lower on Friday.
London's Financial Times-Stock Exchange 100 index was off 0.60 points, or 0.01%, to 4,515 as the pound sterling fell to $1.8847 on profit taking, which makes U.K. shares cheaper. Some 50 FTSE stocks were down and 46 were up on turnover of 512.7 million shares.
In Paris, the CAC 40 was off 26.04 points, or 0.69%, to 3,733.28 as French fourth quarter gross domestic product rose 0.5%, thanks to 0.7% rise in French business investment. 27 CAC stocks were lower and 12 were higher on turnover of 26.3 million shares. Credit Agricole was lower and Total (TOT ) was higher.
Germany's DAX index lost 68.18 points, or 1.65%, to 4,073.35 as December factory orders rose a revised 1.62% but construction orders fell 4.1%. Of the DAX stocks, 21 were lower and 9 were higher on turnover of 50.7 million shares.
Asian markets finished mixed on Friday. In Japan, the Nikkei 225 index lost 33.11 points, or 0.31%, to 10,720.69. Overall, the week was positive for Japan stocks after a a government report showing that the economy grew at its fastest pace in 13 years in the fourth quarter. Nissan was one of the week's strong performers as the yen posted its largest weekly loss versus the dollar since March, 2003. But the issuance of the nation's highest-level terror alert after the close on Friday may weigh on the market when trading resumes Monday.
In Hong Kong, the Hang Seng index added 1.15 points, or 0.01%, to 13,868.37.