Stocks Finish Higher

Next week, investors will get readings on manufacturing, employment, and the Federal Reserve's views

The major indexes pushed higher in the final hour of trading on Friday, the last day of the third quarter, after investors got conflicting signals from the latest batch of economic data. Quarter-end window dressing may have driven some buying interest, says Standard & Poor's MarketScope.

The Dow Jones industrial average rose 15.92 points, or 0.15%, to 10,568.7. The broader Standard & Poor's 500 index was up 1.13 points, or 0.09%, to 1,228.81. The tech-heavy Nasdaq composite index added 10.47 points, or 0.49%, to 2,151.69.

November West Texas Intermediate crude oil was down 55 cents at $66.24 a barrel in electronic trading.

Next week's highlights include the employment report for September on Friday. Economists expect payrolls to drop around 143,000, and the unemployment rate to rise to 5.1% from 4.9% in August.

On Monday, the ISM report, a gauge of national manufacturing activity, is expected to fall to 52 from 53.6 in August.

Other reports coming next week include auto sales, construction spending, and factory orders and inventories.

Federal Reserve members will be on the speaking trail, and "could be one of the more telling indicators (versus hurricane distorted data) in terms of the policy outlook," says Action Economics.

A couple of economic reports came in weaker than expected on Friday. August personal income fell 0.1% while spending fell 0.5% in August. The core PCE deflator rose 0.5% in August vs. an unchanged 0.3% July reading, while the core was up 0.2% from July's unrevised 0.1% rise.

The final September reading of University of Michigan consumer sentiment reading was unchanged at 76.9, a bit lower than forecast.

On the bright side, the September Chicago PMI rebounded to 60.5 in September, much higher than expected, recovering from its 14 point plunge in August to 49.2. Prices paid climbed to 76.3 from 62.9, rising for the fourth month in a row. Orders rose to 63.4 after a 23 point decline in August to 46.5. Employment fell to 48.4 from 51.7. "The rebound in the index and jump in prices paid will push yields and the dollar higher," says Action Economics.

Among companies in the news, Micron Technology (MU ) posted an unexpected profit, lifting the stock and other chips with it.

Verisign (VRSN ) cut its third quarter revenue outlook, but still sees 27 cents non-GAAP earnings per share. It cited a revenue shortfall in the mobile content area. The company also says it repurchased about 9 million shares in the open market in the third quarter for total value of $215 million.

Callaway Golf (ELY ) sees 6-12 cents third-quarter loss per share after charges tied to restructuring, job cuts, other actions, on $215 million in sales. The golf products maker expects to reduce expenses by $70 million over two years, including job cuts.

Treasury Market

Treasury yields marched higher in the wake of the Chicago-PMI rebound, compounded by the jump in the prices paid component, though all the sub-indices, bar employment, were higher, says Action Economics. "The yield curve flattened as the Fed continued to tilt bravely at the inflation outlook," says Action Economics. The yield on the 10-year note moved up to 4.32%.

World Markets

European stock markets finished mixed on Friday. London's Financial Times-Stock Exchange 100 index was flat, ending at 5,477.7.

Germany's DAX index gained 22.95 points, or 0.46%, to 5,044.12. In Paris, the CAC 40 index rose 21.16 points, or 0.46%, to 4,600.02.

Asian markets finished lower on Friday. In Japan, the Nikkei 225 index fell 42.94 points, or 0.32%, to 13,574.3 after a big rally Thursday, reflecting profit taking and weaker-than-expected industrial output data.

Hong Kong's Hang Seng index lost 2.73 points, or 0.02%, to 15,428.52. Losses in large-cap plays including China Mobile and Wharf Holdings weighed on the Hang Seng, says Standard & Poor's MarketScope.

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