The Nasdaq Composite Index lost 15.93 points, or 0.98%, to 1,615,99. The Dow Jones industrial average, meanwhile, added 12.18 points, or 0.12%, to 9,923.87. The Standard & Poor's 500 Index strengthened 2.68 points, or 0.25% to 1,067.34.
Next week will bring a number of key economic data reports. Wall Street will be keenly interested in Monday's release of the Institute of Supply Management's manufacturing index, a gauge of activity in the manufacturing industry. The May reading is seen falling to 53.5 from a 53.9 reading in the previous month. But any reading above 50 indicates an expansion. Also due out Monday are updates on construction spending and domestic vehicle sales for May.
Wednesday brings the ISM's report on service sector activity in May. The reading is expected to dip slightly, to 55.0, from 55.3 in April. Initial jobless claims for the week ended June 1 are due Thursday.
The week's most widely anticipated data release arrives Friday. The employment report for May is projected to show a 65,000 increase in nonfarm payrolls, though the unemployment rate is projected to rise slightly to 6.1%.
On the earnings calendar, the week's highlight will be a mid-quarter update from chipmaking giant Intel (INTC
) on Thursday. Wall Street will be paying close attention to the company's outlook for the rest of 2002.
Companies expected to report results on Monday include Dycom Industries (DY
), a services provider to the telecom industry, and supply chain software company Logility, both due on Monday. Supermarket chain Albertson's (ABS
) is on deck for Wednesday, while chipmaker National Semiconductor (NSM
) is slated for Thursday.
Among the positive economic reports on Friday, factory orders increased 1.2% in April, topping the consensus forecast of a 0.8% increase in orders for manufactured goods.
The Chicago purchasing managers' index, a gauge of regional manufacturing activity, jumped to 60.8 in May while a decline to 54.0 had been expected. Any number above 50 indicates an expansion.
And the final reading on the University of Michigan consumer sentiment index for May was 96.9, slightly higher than the 96.0 preliminary figure. It marks consumer confidence's highest level since December 2000.
The positive reports helped issues in economically sensitive sectors such as department stores, apparel, railroads, oil, and home improvement gain ground Friday. The session's laggards included biotech, Internet, and software stocks.
Lifting chipmaker stocks, the Semiconductor Industry Association said worldwide chip sales in April registered their smallest decline -- 19.4% -- in almost a year, signaling a possible bottoming out.
In corporate news, No. 3 hamburger chain Wendy's International (WEN
) said it will buy Fresh Enterprises, which runs 169 Baja Fresh Mexican Grill restaurants, for $275 million.
In other merger news, heating up the drug sector was a news report that drugmaker Bristol-Myers Squibb (BMY
) has held merger talks with GlaxoSmithKline (GSK
Meanwhile, coffee retailer Starbucks (SBUX
) said same-sales at stores rose 10% in May, boosted by the company's new gift card and blended drinks.
On a downbeat note, hand held device maker Palm (PALM
) said fourth quarter sales missed the company's target by up to 23%.
Cable television operator Adelphia Communications (ADLAE
) announced its stock will be delisted Monday by the Nasdaq after the company defaulted on loan terms.
Research In Motion (RIMM
), which makes the BlackBerry pager, saw its investment rating cut by Credit Suisse First Boston to "hold" from "buy" citing because of evidence of industry weakness.
Looming fears that the standoff between India and Pakistan could escalate into a war continue to haunt the market. Tensions continue to build between the two nations over the disputed state of Kashmir. U.S. Secretary of State Donald Rumsfeld is heading to the region in hopes of defusing the situation. Meanwhile, the U.S. is preparing to move staff out of India after its ordered departure of embassy staff in Pakistan recently.
Treasuries ended lower in price Friday as a run of stronger-than-expected data weighed on the market.
In other economic reports, the government also reported that nonfarm productivity, or hourly worker output of goods and services, grew at an annual rate of 8.4% in the first quarter, which was in line with expectations but slightly below the 8.6% in preliminary numbers. It was still the fastest pace in nearly 19 years.
European markets closed higher. London's FTSE 100 index was up 44.30 points, or 0.88%, to 5085.10 in short covering, and on the higher U.S. opening. Recent economic data have been strong. London markets will be closed Monday and Tuesday for Queen Elizabeth's jubilee.
In Paris, the CAC-40 was higher by 14.50 points, or 0.34%, to 4,274.64 as the French unemployment rate remained unchanged at 9.1% in April, although the number of unemployed rose to an 18-month high.
Germany's DAX index gained 56.34 points, or 1.18% to 4,818.30 as a flash report showed European Union inflation fell 0.2% in May to a 2.0% annual rate, down from 2.4% in April. This suggests that the European Central Bank won't tighten credit next week.
Asian markets closed lower.
The Nikkei index in Japan was down 6.33 points, or 0.05%, to 11,763.70 on renewed fears over Japan's financial conditions after Moody's Investors Services downgraded the country's local currency bond rating by two notches to A2. The downgrade reflects the conclusion that the Japanese government's current and anticipated economic policies will be insufficient to prevent continued deterioration in the country's domestic debt position.
The Hang Seng index in Hong Kong was off 78.67 points, or 0.69%, to 11,301.94.