Stocks End Week with Losses

Investors Friday weighed a raft of economic reports on consumer inflation, manufacturing and consumer sentiment, and industrial production

U.S. stocks closed lower Friday, led by energy, utility and bank issues, as price gains won earlier in the spring lead to profit taking, and the expiration of May options brought additional selling.

Friday's retreat came despite the release of data on consumer prices, industrial production and consumer sentiment that suggested the economy's slide may be slowing.

Some investors were positioning their portfolios before next week's Congressional hearing on TARP, notes S&P MarketScope. There is little economic data next week to back up Friday's reports that reinforced the view the U.S. is experiencing an ongoing diminishing downdraft, according to S&P.

The April consumer price index was unchanged, while the core index, which excludes food and energy prices, was up 0.3%. The New York Fed's May Empire State index rose to a higher than expected -4.55 from -14.65 in April.

Meanwhile, April industrial production fell 0.5%, capacity utilization dipped to 69.1%, and the University of Michigan consumer sentiment index rose to 67.9 in May from 65.1 in April.

On Friday, the 30-stock Dow Jones industrial average finished lower by 62.68 points, or 0.75%, at 8,268.64. The broader S&P 500 index fell 10.19 points, or 1.14%, to 882.88. The tech-heavy Nasdaq composite index shed 9.07 points, or 0.54%, to 1,680.14. On the New York Stock Exchange, 19 stocks were lower in price for every 11 that advanced. Nasdaq breadth was 16-11 negative.

Treasuries were lower after the release of a report showing an increase in overseas demand for U.S. government debt. The dollar index was up, and the euro was lower vs. the dollar as Eurozone GDP slumped. Gold futures were higher. Oil futures were lower.

General Motors Corp. (GM), under the direction of the U.S. Treasury, is near a deal that would cut its hourly labor costs by more than $1 billion a year and reduce its $20 billion pledge to the United Auto Workers to cover health-care obligations, said people familiar with the matter cited in a Wall Street Journal report. The plan is still in flux, but GM and the union could finalize terms as early as next week. The Detroit auto maker expects to halve its remaining cash outlays for retiree health costs to about $10 billion, and supplement that contribution with a 39% equity stake in the reorganized GM, the people familiar with the matter said. Cutting GM's health-care costs is an essential part of the "controlled bankruptcy" plan the Treasury Department is formulating for GM.

Federal officials have pressured Bank of America Corp. (BAC) to revamp its board by bringing in directors with more banking experience, reports the Journal, as regulators place the bank under increasingly heavy government scrutiny. The move represents unusual influence by the federal government over the workings of a financial institution in which it doesn't own a stake. It's particularly significant because many of the bank's woes stem from its purchase of Merrill Lynch -- an acquisition that was completed after heavy prodding by federal regulators. The Merrill deliberations were the beginning of regulators' deepening involvement in the Charlotte, N.C., lender's day-to-day operations.

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