After lingering in the red most of the session, stocks finished with small gains on Friday. Strong economic data helped extend the recent market rally for a seventh straight session, according to Standard & Poor's MarketScope.
The Dow Jones industrial average rose 11.94 points, or 0.11%, to 10,640.83. The broader Standard & Poor's 500 index was up 1.42 points, or 0.12%, to 1,227.92 -- a four-year high. The tech-heavy Nasdaq composite added 3.96 points, or 0.18%, to 2,156.78.
In the energy markets Friday, August West Texas Intermediate crude oil settled up 29 cents at $58.09 a barrel. Short covering into the weekend led the early charge higher, largely the result of storm concerns, says Action Economics. However, Hurricane Emily, currently a strong category 4 storm, could ultimately miss the bulk of production platforms in the Gulf of Mexico, as she heads toward the western end of the Gulf, says Action.
Next week's main event is Federal Reserve Chairman Alan Greenspan's monetary policy report to Congress on Wednesday and Thursday. Action Economics expects him to remain upbeat on U.S. economic growth into 2006, and relatively sanguine on inflation, while reiterating risks from higher oil prices and a frothy housing market (similar to his June 9 testimony).
On the economic calendar, investors will get updates on housing starts, leading indicators, and the Philadelphia Fed Index.
Next week's earnings calendar is packed, and starts off Monday with IBM (IBM ), 3M (MMM ), Citigroup (C ), and Bank of America (BAC ).
Tuesday brings results from companies such as Intel (INTC ), Motorola (MOT ), Yahoo (YHOO ), Amgen (AMGN ), Ford (F ), Johnson & Johnson (JNJ ), and Wachovia (WB ).
On Wednesday, eBay (EBAY ), General Motors (GM ), Pfizer (PFE ), and Qualcomm (QCOM ) are just a few companies reporting earnings.
Thursday's earnings docket includes Caterpillar (CAT ), EMC (EMC ), Eli Lilly (LLY ), Google (GOOG ) and Microsoft (MSFT ).
On Friday, July 15, economic news boosted sentiment. Consumer sentiment edged up to 96.5 in July, according to the University of Michigan index, after a solid 96.0 for the final June reading. The current conditions index dipped to 112.0 from 113.2. The future outlook index rose to 86.6 from 85.0. "The data are more good news for the economy," says Action Economics.
Industrial production climbed 0.9% in June, well above the forecast, while capacity utilizatoin use was up to 80%.
The producer price index, a measure of wholesale inflation, was flat, while the core index, which excludes volatile food and energy prices, was down 0.1% in June. That's much better than expected. Gas prices rebounded 8.7% after a 9.9% slump. Passenger car prices fell another 1.0% following a 0.2% dip in May. Intermediate goods prices were up 0.1% and core prices were down 0.2%. Meanwhile, crude prices fell 3.3%, and core crude prices were down 4.3%.
Business inventories rose 0.1% in May, below the median forecast of 0.4%, vs. a 0.2% in April rise. Sales fell 0.1%. The inventory to sales ratio was steady at 1.3 months.
The Empire State index, a regional gauge of manufacturing activity, climbed to 23.9 in July, stronger than expected, after a revised 10.49 in June. The components were mixed. Prices paid fell to 21.57 from 30.30. New orders jumped to 19.15 from 8.14. Employment fell to 1.42 from 5.46.
In earnings news, General Electric (GE ) reported second-quarter earnings per share of 44 cents, vs. 36 cents a year ago, on a 13% revenue rise. It narrowed its EPS outlook to the high end of original guidance for 2005, and now expects $1.80-$1.83 EPS.
Priceline.com (PCLN ) updated second-quarter EPS guidance to 36-40 cents (pro forma), from 34-40 cents, on revenues of $265-$270 million. It sees $1.20-$1.28 2005 EPS, which reflects the acquisition of Bookings B.V.
Dow component McDonald's (MCD ) gained Friday after reporting a 3.8% rise in same-store sales for June. However, the fast-food giant sees earnings repatriation taxes cutting into its second-quarter results.
Treasury prices were mixed Friday as the strong growth in industrial production offset the flat PPI reading, according to S&P MarketScope. The 10-year yield settled at 4.17%.
European stock markets finished mixed on Friday. London's FTSE 100 index was off 28.9 points, or 0.55%, to 5,230.8 on profit taking and higher oil prices.
Germany's DAX index rose 13.63 points, or 0.29%, to 4,712.9 in a carryover of the recent rally.
In Paris, the CAC 40 index edged up 2.89 points, or 0.07%, to 4,373.77.
Asian markets closed mixed on Friday, consolidating this week's gains.
In Japan, the Nikkei index edged down 5.58 points, or 0.05%, to 11,758.68, as a round of selling just before the market close erased much of the gains achieved during the day. This likely reflects some profit taking ahead of a three-day holiday weekend, says Standard & Poor's MarketScope.
In Hong Kong, the Hang Seng index rose 12.75 points, or 0.09%, to 14,504.29. CNOOC tumbled 4%, down for the second straight day, on talk of the company raising its offer for Unocal. This capped market gains. Utility issues rose as market participants sought shares that had been left behind in this week's rally.