Stocks Close Mixed
Technology stocks managed to eke out a small gain on Thursday after three down sessions, but the broader market sagged as investors digested more negative corporate news amid increasing uncertainty on the global front.
The tech-packed Nasdaq Composite Index gained 7.52 points, or 0.46%, to 1,631.91. The Dow Jones industrial average, meanwhile, eased 11.35 points, or 0.11%, to 9,911.69 after posting bigger losses earlier in the session. The Standard & Poor's 500 Index ended off 3 points, or 0.28% to 1064.66.
Friday's economic data docket will be heavy compared to the rest of the week. First out before the market opens are revised numbers on U.S. productivity in the first quarter. Standard & Poor's economic research unit MMS sees the revised productivity number at an increase of 8.0% vs. 8.6%.
Due out after the market opens are reports on U.S. factory orders in April, regional manufacturing activity in May and a gauge of consumer sentiment in May. Factory orders in April are expected to increase 0.8% compared with a 0.4% increase in the previous month.
The Chicago Institute of Supply Management index of manufacturing activity in May, meanwhile, is expected to decline to 54.0 from 54.7 in the previous month. Still, any number above 50 indicates an expansion. And the final reading on the University of Michigan consumer sentiment index for May is expected to register 96.0 which would match the earlier reading.
Few big name companies are expected to release earnings on Friday. One company due to report quarterly results is medical equipment company Medical Action Industries (MDCI ).
In tech news on Thursday, software giant Microsoft (MSFT ) is reportedly in talks with the Securities and Exchange Commission to settle charges that it misrepresented, according to a Wall Street Journal report, which cited unnamed sources.
In other corporate news, Hewlett-Packard (HPQ ), the computer and printer maker which recently merged with Compaq, plans to shut down the week of July 4 to save money, according to a wire-service report.
Rival computer maker and services giant IBM (IBM ) said it cut an unspecified number of services jobs at a range of U.S. locations.
Meanwhile, fears that the standoff between India and Pakistan could escalate into a war continue to weigh on the market. Tensions continue to build between the two nations over the disputed state of Kashmir. Pakistan, a nuclear power like India, has reportedly warned that it may move troops from its border with Afghanistan to its border with India.
News reports of FBI warnings that al Qaeda may possess shoulder-fired anti-aircraft missiles also appeared to unsettle investors. But the bureau reportedly says it has no information that the organization has any plans to use the weapons against U.S. aircraft.
On an upbeat note, No. 1 U.S. warehouse chain Costco (COST ) posted 24% higher net income as value-conscious consumers flocked to the store, which sells products in bulk.
Upscale retailer Neiman Marcus (NMGA ) reported a 24% jump in net income, thanks to fewer markdowns and a one-time gain.
In merger news, No. 1 cigarette maker Philip Morris (MO ) says it is selling its Miller Brewing unit to South African Breweries for $5.6 billion in stock and assumed debt.
In economic news, the number of workers filing for the first time for unemployment benefits fell as expected to 410,000 in the week ending May 25 from 416,000 in the previous week.
Federal Reserve Bank of Dallas President Robert McTeer said the current jobless recovery resembles that of the early 1990's (in comments to the Montreal Economic Institute), MMS reports. McTeer looks for second quarter growth to fall somewhere in between that of fourth quarter (1.7%) and first quarter (5.6%). He remains optimistic that productivity will help support growth, MMS says. However, he also warned that the jobless rate may rise a "bit more."
Treasuries ended higher as most equities wallowed in negative territory. Standard & Poor's economic research unit MMS says Treasuries remain well bid despite dollar weakness, finding support from a number of fronts. Safe-haven demand seems relentless given weakness in equities and increased tensions between India and Pakistan. Sources say there has been continued strong demand from central banks (possibly currency related) in shorter dated notes, as has been the case most of the week, according to MMS.
European markets ended lower. London's FTSE 100 index was down 42.20 points, or 0.83%, to 5040.80 as UK house prices rose 2.1% in May or 17.9% in annualized basis, the fastest annual pace since 1964. At the same time, consumer lending rose record 7.67 billion pounds in April as the lowest interest rates in 38 years triggered consumer spending.
In Paris, the CAC-40 was down 74.71 points, or 1.72%, to 4,260.14 following a report that the European Union trimmed second quarter economic estimates after reporting weaker than expected first quarter GDP.
Germany's DAX index was off 119.84 points, or 2.45% to 4,761.96 on US stocks trading lower. Some investors are disappointed that EuroZone first quarter GDP rose a less than expected 0.2%. The European Union trimmed second quarter estimates.
Asian markets closed lower.
The Nikkei index in Japan was down 82.97 points, or 0.70%, to 11,770.03 led by exporter shares following the weak finish on Wall Street in the wake of earnings concerns.
The Hang Seng index in Hong Kong was off 50.05 points, or 0.44%, to 11,380.61.