Snapping a four-day slide, stocks finished higher Friday, led by technology stocks after Oracle (ORCL) met February-quarter earnings estimates, and Dell (DELL) received upgrades from two Wall Street firms. The gains were fueled by short-covering and bargain hunting, notes Standard & Poor's MarketScope.
The tech-heavy Nasdaq composite index jumped 40.82 points, or 2.1%, to 1,984.71. The Dow Jones industrial average rose 111.7 points, or 1.1%, to 10,240.08. And the broader Standard & Poor's 500-stock index was up 13.79 points, or 1.25%, to 1,120.57.
However, the main market benchmarks still lost ground on the week, remaining below their key 50-day moving averages, notes economic research outfit Informa Global Markets. On Thursday, the major indexes hit fresh lows for the year after a London newspaper reported having received a letter from Al Qaeda claiming responsibility for the terrorist bombings in Madrid.
Next week, the main event is the Federal Open Market Committe Meeting on Tuesday. Economists expect the FOMC to keep interest rates steady, with the federal funds rate remaining at 1%. "With payrolls flat and inflation calm, the Fed has no reason to move, at least until after the election," wrote Standard & Poor's chief economist David Wyss in a report Friday.
Economic data to keep an eye on next week include Monday's updates on industrial production and capacity utilization, Tuesday's reports on housing starts and building permits, and Wednesday's release on the consumer price index. Thursday will bring the latest weekly jobless claims, leading indicators, and the Philadelphia Fed index.
On the earnings front, some of the major companies scheduled to report results include Dollar General (DG), ImClone Systems (IMCL), General Mills (GIS), Lehman Brothers (LEH), FedEx (FDX), Vivendi (V), Darden Restaurants (DRI), Bear Stearns (BSC), 3Com (COMS), Adobe Systems (ADBE), Morgan Stanley (MWD), Nike (NKE), and Williams-Sonoma (WSM).
Among stocks in the news Friday, Aetna (AET) raised its operating earnings per share guidance from $1.50 to $1.55 to $1.68 to $1.73 for the first quarter, and from $6.25 to $6.35 in 2003 to $6.60 to $6.75. The HMO provider cites favorable trends in medical and pharmacy membership, moderate medical costs, and operating expense efficiency. The shares rose on the news. S&P upgraded its investment opinion on the shares to buy from accumulate.
In tech, Oracle reported third-quarter EPS of 12 cents, meeting analysts' forecast and up from 11 cents a year ago, on a 9% revenue rise.
JP Morgan reportedly raised its rating on Dell to overweight from neutral. Morgan Stanley upgraded the shares to overweight from equal-weight.
Banc of America upgraded Jabil Circuit (JBL) to buy from neutral, saying it thinks new business will drive better than expected results for the electronic manufacturing services provider, especially in the second half of this year.
In economic news, the University of Michigan consumer sentiment index for March came in at 94.1, vs. a prior (and a median estimate of) 94.4. There was some shifting around between the components, with the current economic conditions index at 105.7, vs. a prior 103.6, while the outlook index came in at 86.6, vs. a prior 88.5. Investors looked beyond the headline drop in the Michigan consumer sentiment reading, as the current conditons component actually rose, notes Informa Global Markets.
The U.S. current account deficit for the fourth quarter narrowed sharply to $127.5 billion, vs. a revised $135.3 billion in the third quarter. Expectations were for a widening.
U.S. business inventories in January rose a small 0.1% following a 0.3% gain in December and marked the fifth straight monthly rise. The January gain was below market consensus. Manufacturing inventories were up 0.2%, while wholesalers and retailing posted a smaller 0.1% rise each.
U.S. business sales rose 0.4% in January overall (up 6.4% year-over-year) after a 1.4% rise the month before, thereby leaving the inventory/sales ratio at a record low of 1.33 months. Retail sales rose 0.1% on the month after being up a stronger 0.4% in December. Manufacturing sales were better at 0.5%, while wholesalers posted a 0.6% monthly sales gain.
It was another choppy session for Treasuries on Friday. Geopolitics underpinned a bid, but traders gave up by the close, reports Informa Global Markets. The benchmark 10-year note dipped slightly in price, yielding 3.81% at the close.
European stock markets finished higher Friday as the markets rebounded from Thursday's sharp losses sparked by the Madrid bombings.
London's Financial Times-Stock Exchange 100 index rose 22.2 points, or 0.5%, to 4,467.4. Shares of Carnival, Hilton Group, and International Hotels were lower on worries that the Madrid bombings will hurt tourism business.
Germany's DAX index gained 10.43 points, or 0.27%, to 3,915.38. In Paris, the CAC 40 was up 15.35 points, or 0.42%, to 3,661.78. French industrial production fell 0.5% in January.
Asian markets finished lower on Friday. In Japan, the Nikkei 225 index lost 134.29 points, or 1.19%, to 11,162.75. In Hong Kong, the Hang Seng index fell 91.83 points, or 0.71%, to 12,932.23.