Stocks finished mixed on Friday as oil prices spiked to $75 a barrel. This offset upbeat earnings news from Google (GOOG) and others. Although stock investor psychology is largely focused on corporate earnings, which helped propel blue chips to six-year highs this week, the jump in oil to record highs is hanging over the market.
The Dow Jones industrial average rose 4.56 points, or 0.04%, to 11,347.45. The broader Standard & Poor's 500 index edged down 0.18 point, or 0.01%, to 1,311.28. The tech-heavy Nasdaq composite lost 19.69 points, or 0.83%, to 2,342.86, amid weakness in semis and a Citigroup downgrade of Dell (DELL).
In the energy markets, June NYMEX crude oil jumped $1.48 at a new record front-month high of $75.17 a barrel. Renewed fund buying was noted, in afternoon trade, with pre-weekend short covering, says Action Economics.
"3M and Google earnings boosted sentiment (Ford missed badly), but oil remains a stiff headwind going forward as it could pinch economic growth and earnings down the road," says Action Economics.
There will be plenty of news for investors next week. Federal Reserve Chairman Ben Bernanke's JEC testimony Thursday will be a highlight. The economic calendar includes existing and new home sales, durable orders and consumer confidence, with first-quarter gross domestic product (GDP) and employment cost index (ECI) out on Friday. Meanwhile, the Fed's Beige Book Wednesday could foreshadow the chairman's remarks, says Action Economics.
After the market close Thursday, Google posted earnings per share of $2.29 excluding stock option expenses, beating the estimate of $1.97 a share. Revenue shot up 79% from a year ago to $2.25 billion. The search company expects 2006 capex growth will be greater than 2006 revenue growth. The stock jumped on the news.
Broadcom (BRCM) posted first-quarter EPS of 22 cents, vs. 13 cents a year ago (GAAP), on a 64% revenue rise.
Stryker (SYK) rose, boosting other health-care equipment stocks, after it posted higher first-quarter earnings on a 9.8% sales rise. S&P upgraded the stock to buy from hold.
Sandisk (SNDK) lost ground after the computer storage maker reported a significant drop in first-quarter GAAP EPS vs. a year ago.
Among big blue chips, Ford (F) posted first-quarter EPS from continuing operations of 24 cents (excluding special items), vs. 58 cents, on 9% lower sales.
3M (MMM) reported first-quarter EPS of $1.17 (including stock option expenses), vs. 97 cents, on an 8% sales rise. The maker of Scotch Tape and other products raised 2006 EPS guidance to $4.55-$4.65 (including 16 cents stock option expense), and organic local-currency revenue growth to 5.5%-8%.
Other companies on Friday's earnings calendar were RadioShack (RSH), Halliburton (HAL) and Schlumberger (SLB).
In other news, eBay (EBAY) is reportedly talking to both Yahoo (YHOO) and Microsoft (MSFT) about the possibility of working together to thwart growing competition from Google, according to The Wall Street Journal.
Treasury prices rose, sending the yield on the 10-year note down to 5.01%. Trading was quiet heading into the weekend, with nothing on today's economic data calendar, says Action Economics.