Stocks Finish with Slight Gains

But the major indexes posted losses for the week, ending a five-week positive run for the S&P and Nasdaq

Stocks finished with narrow gains Friday. Major indexes drifted in light trading ahead of the long weekend, without any significant economic or earnings data to move the market. Some sectors gained strength from new tax cut legislation.

The Dow Jones industrial average was up 7.36 points, or 0.09%, at 8,601.38. The broader Standard & Poor's 500 stock index rose 1.35 points, or 0.14%, to 933.22. The tech-heavy Nasdaq composite index gained 2.54 points, or 0.17%, to 1,510.09.

Major indexes extended -- barely -- Thursday's wide gains. A two-month rally had been interrupted earlier in the week with two losing sessions. "This bodes well for further uptrend," notes economic research firm MMS International.

Nevertheless, the major indexes all closed down for the week -- owing in large part to a sharp sell-off on May 19. For the week, the Dow pared 0.1%, the S&P lost 1.2%, and the Nasdaq slipped 1.8%. The S&P and Nasdaq indexes had posted five consecutive positive weeks.

Utility stocks were broadly higher, getting a further boost from the new tax cuts on dividends contained in legislation passed by the House and Senate Friday morning. President Bush is expected to sign the tax-cut bill this weekend.

Tobacco stocks also benefited from the dividend tax cut. Shares of Altria Group (MO ), parent of Phillip Morris USA, were higher by 2%. Altria stock gained 25% on the week, thanks largely to a Florida court's reversal of a $145 billion tobacco lawsuit.

In earnings news, sporting goods retailer The Sports Authority (TSA ) reported a more than 70% drop in quarterly profits. Revenues fell 4% for the quarter to $339 million, while same-store sales dipped 5.7%.

After the close of trading Thursday, clothier The Gap (GPS ) announced quarterly earnings of 22 cents a share, up from 4 cents a share the previous year. Despite the earnings increase, shares were lower Friday, on investor worries about future retail sales.

Technology shares were supported on Friday by Marvell Technology Group (MRVL ). The semiconductor maker swung to a profit in the first quarter. Shares in Marvell were trading higher by more than 16%.

Aerospace giant Boeing (BA ) was one of the Dow's biggest gainers with a 3% advance. News of a $21 billion contract to lease Air Force fueling tankers from Boeing lifted shares.

On the commodities front, both oil and gold prices were higher. Oil prices rose on supply concerns, while gold rose on a weaker dollar.

Investors await plenty of economic news next week. On tap are consumer confidence and sentiment data, new and existing home sales, durable goods orders, revised first-quarter gross domestic product, and the Chicago Purchasing Manager's Index.

Next week will also be a light one for corporate earnings reports. Among companies expected to announce quarterly results: telecommunications outfits Vodafone (VOD ) and Qwest (Q ), wholesale club operator Costco (COST ), and retailer Dollar General (DG ).

Markets will be closed Monday, May 26, for Memorial Day.

Treasury Market

Prices of U.S. Treasuries finished mixed Friday. Shorter-term issues fell in price on profit-taking, the 30-year note benefited from continued curve flattening. The price of the 10-year note briefly hit an all-time high Friday morning. By afternoon, the 10-year's yield was 3.34%.

The bond market closed early, at 2 p.m. ET, Friday in advance of the long weekend. The bond markets will not open May 26 in observance of Memorial Day.

In the week ahead, "buying may not be robust with prices at or near all-time highs, but sellers aren't likely to be aggressive either," notes MMS. In his closely watched Wednesday testimony before the Joint Economic Committee, Fed Chairman Alan Greenspan "may have discouraged expectations for an intermeeting rate cut, but he did not shut the door on the possibility of further accommodation."

World Markets

European markets finished trading lower Friday. London's FTSE index was down 10.6 points, or 0.27%, to 3,979.8. In the first quarter, U.K. gross domestic product rose only 0.2%, and consumer spending showed the smallest gain in six years. In Paris, the CAC-40 index lost 6.11 points, or 0.21%, to 2,897.16. In Frankfurt, the DAX index shed 42.38 points, or 1.48%, to 2,822.83.

In Asia, stocks finished higher. Japan's Nikkei 225 index rose 133.1 points, or 1.65%, to 8,184.76, led by foreign buying in tech stocks. Meanwhile, Hong Kong's benchmark Hang Seng index increased 172.24 points, or 1.89%, to 9,303.73.

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