Stocks closed modestly lower on Friday. After trading higher for much of the session, major indexes faded in the final hour as investors decided that the day's economic and corporate news was not upbeat enough to extend the rally of Thursday's session.
The Dow Jones industrial average eased 5.85 points, or 0.06%, to 10,212.97, after jumping 170 points in the previous session. The broader Standard & Poor's 500-stock index lost 1.13 points, or 0.10%, to 1,108.06. The tech-heavy Nasdaq composite index gave up 7.15 points, or 0.36%, to 1,960.02. Some 1.3 billion shares changed hands on the Big Board while volume on the Nasdaq was more than 1.6 billion.
For much of the session, blue chips' advance was paced by General Electric (GE ), which moved higher after Merrill Lynch added the stock to its Focus One list. Health care distributors were higher on an upgrade of the sector by Goldman Sachs.
In merger headlines Friday, U.S. grocery chain Albertsons (ABS ) said it would buy the U.S. supermarkets of UK chain J Sainsbury for about $2.5 billion.
And Internet media company Yahoo! (YHOO ) said it would buy European online comparison shopping outfit Kelkoo for about $575 million.
In other equities news, satellite TV company EchoStar (DISH ) posted lower than expected fourth-quarter profits of one cent per share.
In economic news, the headline index of the University of Michigan consumer sentiment survey bounced nicely late in March, to 95.8, vs. 94.1 at mid-month, according to economic research firm Informa Global Markets. The current conditions index is now at 106.8, vs. a prior 105.7, while the outlook index stands at 88.8, vs. 86.6.
Meanwhile, U.S. personal income rose by 0.4% in February, vs. a central expectation of a 0.3% rise, according to Informa. Personal consumption spending rose 0.2%, vs. a median estimate of a 0.4% rise. The firm says there has been a steady slowing in real spending from November (+0.7%) to February's flat showing.
"Overall market volume remained below average suggesting that today's attempted follow-through rally lacked real buying support by big accounts," Informa Global Markets says. Also, investors digested a corporate tax proposal by Sen. John Kerry.
In other equities news, ConAgra Foods (CAG ) posted a 26% rise in third-quarter profits, narrowly beating estimates, thanks to strong sales from brands like Armour, Banquet, and Chef Boyardee.
Financial services firm A.G. Edwards (AGE ) posted profits that more than doubled in its latest quarter thanks to higher commission revenue as investors got back into stocks and mutual funds.
Treasuries ended lower despite the sell-off in equities. The pop in the Michigan data helped spark a further pullback in Treasuries, according to Informa Global Markets.
European stock markets closed mixed on Thursday. London's Financial Times-Stock Exchange 100 index was off 16.10 points, or 0.37%, to 4,357.50. Standard & Poor's European MarketScope reports that UK retailing stocks slumped, offsetting gains in the mining sector. Boots shed 10.7% as analysts downgrade the shares after this morning's trading update showed increased pension and investment costs. A profit warning at Sainsbury sent the shares plunging 8.6%. News of the sales of the company's U.S. unit Shaw's failed to counter investor frustration at continued negative newsflow.
In Paris, the CAC 40 was up 21.99 points, or 0.62%, to 3,592.39. Standard & Poor's European MarketScope reports JC Decaux (+3.09%) traded in high spirits on press reports saying Viacom is eyeing a merger with it, though no talks are currently underway.
Germany's DAX index added 10.41 points, or 0.27%, to 3,822.33. Standard & Poor's European MarketScope reports shares picking up again at mid-session having slipped off morning highs earlier after the Ifo pan-German business climate index came in at 95.4, from 96.4 and vs. expectations of 95.7. Among the drivers of the German index is Lufthansa (+3.25%), which is benefiting from the positive outlook it released at yesterday's analyst meeting and as concerns about terrorist attacks abate.
In Asia, the equity markets finished mixed. The Nikkei 225 index added 239.74 points, or 2.08%, to 11,770.65. The main catalyst for today's upbeat session came from the 3% surge on the Nasdaq and broad gains on Wall Street. Hitachi, the main supplier of one-inch hard disks to Apple, rose strongly on news that Apple's iPod mini sales are doing well. Nippon Steel led steelmakers on an NKS report that steel prices are set to rise by 5% to 10%. Losers were led by Credit Saison, Ito-Yokado, and Daiwa House. This morning's release of a higher than expected household spending (+6.9% year-over-year, vs. consensus of +3.5%) also added fuel to the positive sentiment while retail sales rose for the second straight month (February retail sales up 0.9% year-over-year, vs. consensus of +1.6%).
In Hong Kong, the Hang Seng index eased 36.97 points, or 0.30%, to 12,483.24.