Stocks Finish Higher

Better-than-expected consumer sentiment data overshadowed weak earnings and a record drop in U.S. wholesale prices

Stocks edged higher on Friday as investors shrugged off yet more disappointing earnings reports to focus on signs that consumer confidence may be recovering after the deadly terrorist attacks in the U.S.

In the global war on terrorism, reports that the U.S.-backed Northern Alliance had captured the Afghanistan town Mazar-e-Sharif on Friday may have helped buoy the market, Standard & Poor's MMS research unit said. But the news report, which came from the Northern Alliance, has not been confirmed. It would represent a key strategic victory for the U.S.

The market overall had a solid week after the U.S. Federal Reserve slashed interest rates by another half percentage point on Tuesday followed by a similar action by the European Central Bank on Thursday.

The good news on Friday included a better-than-expected reading of U.S. consumer confidence that fueled hopes the aggressive rate cuts by the Federal Reserve, which have taken the Federal Funds rate to a four-decade low of 2.0%, may be kicking in. Lower borrowing costs can stimulate company and consumer spending.

The University of Michigan's consumer confidence index rose to 83.5 in its preliminary reading for November from a final reading of 82.7 in October, according to news reports.

Among the stocks in the news Friday, entertainment giant Walt Disney Co. (DIS ) reported quarterly earnings below Wall Street expectations due to weak television advertising and slumping theme-park attendance following the September 11 attacks, according to news reports.

H.J. Heinz (HNZ ) was under pressure after scaling back its earnings outlook, citing the slowdown in the economy and other problems.

The Dow Jones industrial average was up 20.49 points, or 0.2%, to 9,609. The tech-heavy Nasdaq composite index inched up 0.72 of a point to 1,828.49. The broader S&P 500 index was up 0.2%.

Treasury Market

U.S. Treasuries ended lower in a shortened session. The bond market closed early in advance of the Veterans Day holiday. The market will be closed on Monday in observance of the holiday. MMS said traders were cashing in profits.

In other economic news, the Labor Department reported U.S. wholesale prices plunged at the sharpest rate on record in October, as a slowing global economy lowered imported energy prices. Prices also were impacted by domestic carmakers offering cut-rate financing to attract buyers after the Sept. 11 attacks.

The Producer Price Index dropped a much-steeper-than-expected 1.6% in October -- a stark change since the back-to-back 0.4% gains recorded in August and September. The decrease in prices in October sharply exceeded Wall Street economists' forecasts for a 0.4% fall and was the biggest slide for any month since the government began keeping records in 1947, according to press reports.

World Markets

European markets were lower. In London, the Financial Times-Stock Exchange 100 index closed down 33.90 points, or 0.64%, to 5,244.20 on profit taking and uncertainty about economic recovery. In France, the CAC 40 finished off 58.76 points, or 1.28%, to 4,514.28. And in Germany, the DAX Index was down 83.50 points, or 1.67%, to 4,910.07 in profit taking before the weekend. Many economic uncertainties remain despite the European Central Bank rate cut on Thursday.

In Asia, the markets ended mixed. Japan's Nikkei fell 216.08 points, or 2.07%, to 10,215.71 as the mood darkened after the government said it expects the economy to shrink 0.9% in the year to March, down sharply from its previous estimate of 1.7% growth. In Hong Kong, the Hang Seng index gained 70.63 points, or 0.67%, to 10,609.25.

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