Stocks finished higher Friday for a fifth consecutive session, recovering from early lows as investors digested Dell's (DELL) lackluster quarterly results. A lower-than-expected reading of the University of Michigan's consumer sentiment index provided further indications of economic slowdown, boosting bond prices, says Standard & Poor's Equity Research.
The Dow Jones industrial average rose 46.51 points, or 0.41%, to 11,381.47, finishing the week up 2.6%. The broader Standard & Poor's 500 added 4.82 points, or 0.37%, to 1,302.3, a gain of 2.8% for the week. The tech-heavy Nasdaq composite was up 6.34 points, or 0.29%, to 2,163.95, a 5.1% weekly rise.
NYSE breadth was positive, with 19 issues advancing for every 13 declining, while Nasdaq breadth turned positive in the closing hour. Trading volume was moderate and "typical for a Friday in August," says S&P.
Economic reports and positive geopolitical news cheered Wall Street in recent days, analysts say. "An encouraging producer price report and the outbreak of peace (at least temporarily) in the Middle East encouraged stock and bond markets this week," says David Wyss, chief economist at Standard & Poor's. "Markets are more hopeful that the Fed's pause will be permanent, although we still expect one more rate hike."
Investors were focusing on a computer maker's disappointing earnings report Friday. Dell shares fell sharply after the company said second-quarter profit dropped 51% and disclosed an SEC investigation. Goldman Sachs lowered its rating on the stock from neutral to sell.
On the upside, Microsoft (MSFT) gained ground after the software giant said it hiked its share-buyback plan by $16.2 billion to a total of $36.2 billion. The company also says it plans to spend about $3.8 billion buying shares in a recent Dutch auction, according to news reports.
Altria (MO) and Reynolds American (RAI) rose after a federal judge did not impose penalties in ruling that the cigarette makers violated anti-racketeering laws.
Shares of Ford (F) fell after the company announced steep cuts in production that would cause 10 North American plants to be shut for substantial periods during the rest of the year.
Digital video-recording company TiVo (TIVO) surged after a federal judge granted the company's motion for a permanent injunction to prevent EchoStar Communications (DISH)from manufacturing and selling its DVR products in the U.S.
Some companies continued to face accounting issues. Marvell Technology (MRVL) was sharply lower after the chip designer delayed the release of its full second-quarter results as the company reviews its stock-options practices.
Software maker Autodesk (ADSK) also delayed reporting its full second-quarter results amid an internal stock-options review.
The economic calendar was light Friday after a full week of data. The preliminary release of the University of Michigan's consumer sentiment survey showed a lower-than-expected 78.7 level in August, down from 84.7 in July.
The docket is quiet next week for economic data. Investors will be sifting through releases on July new and existing home sales, as well as durable goods orders.
In the energy markets, September West Texas Intermediate crude oil futures rose $1.08 to $71.14 a barrel after closing the previous session at a two-month low.
European markets finished mostly lower. In London, the Financial Times-Stock Exchange 100 index inched higher 3 points, or 0.05%, to 5,903.4. Germany's DAX index lost 16.49 points, or 0.28%, to 5,135.69. In Paris, the CAC 40 index was down 9.15 points, or 0.18%, to 5,135.69.
Asian markets finished mixed. Japan's Nikkei 225 index gained 85.52 points, or 0.53%, to 16,105.98. In Hong Kong, the Hang Seng index lost 42.35 points, or 0.24%, to 17,330.7. Korea's Kospi index advanced 3.32 points, or 0.25%, to 1,331.1.
Treasury yields ticked lower after the soft Michigan sentiment reading. The 10-year note rose in price to 100-11/32 for a yield of 4.83%, while the 30-year bond gained to 92-25/32 for a yield of 4.97%.