"I think the market is basically digesting what happened [Thursday], when we had a big move up," Thomas DeHudy, lead manager of ARK Funds: Capital Growth Port/Retail A (ARGAX
), told Standard & Poor's.
Much of the focus Friday was on second-quarter results. Toy retailer Toys R Us Inc. (TOY
), for example, warned its second-quarter and full-year profits would fall short of Wall Street forecasts, as the slowing economy and spending to remodel stores have hurt results. Shares of Toys R Us ended lower.
Following through on Thursday's rally, the Dow Jones Industrial Average finished up 59.26 points, or 0.57%, to 10,538.25. The tech-heavy Nasdaq Composite added 8.71 points, or 0.42%, to 2,084.45. The broader S&P 500 Index gained 7.36 points, or 0.61%, to 1,215.50.
U.S. Treasuries ended higher, amid worries Argentina's debt crisis might spread and mixed economic data, which showed low inflation, weak retail sales, and improved consumer confidence.
The Labor Department said the Producer Price Index, a gauge of inflation at the wholesale level, fell in June at the sharpest rate in more than two years. The index slid 0.4% last month after a slim 0.1% gain in the prior month. Also, retail sales posted modest gains. The Commerce Department said June retail sales were up 0.2% to a seasonally adjusted $292.9 billion following a revised 0.4% gain in May. And U.S. consumer confidence crept higher for a third straight month in July. The University of Michigan's preliminary July consumer sentiment index pushed up to 93.7 from 92.6 in June, extending a gradual rebound from a floor of 90.6 in February, its lowest level in nearly five years.
In addition to the new economic data, traders contacted by Standard & Poor's said they're focused on Federal Reserve Chairman Alan Greenspan's trip next week to Capitol Hill. He's scheduled to deliver his monetary policy report, formerly known as Humphrey-Hawkins, to Congress on Wednesday.
European markets ended higher. In London, the Financial Times-Stock Exchange 100 index was up 55.40 points, or 1.01%, to 5,537. In Germany, the DAX Index added 31.37 points, or 0.53%, to 5,921.25. In France, the CAC 40 gained 63.81 points, or 1.29%, to 5,025.24.
In Asia, markets finished lower. The Nikkei was down 52.80 points, or 0.43%, to 12,355.15, as investors took profits off the table. In Hong Kong, the market lost 47.41 points, or 0.37%, to 12,612.79. By Heesun Wee in New York