Stocks finished lower Friday, extending a decline that began Thursday on reports indicating the economy could be slowing more than expected. Reports next week on housing and economic growth could shed further light on whether the economy is headed for a hard or soft landing, says Standard & Poor's Equity Research.
The Dow Jones industrial average fell 25.13 points, or 0.22%, to 11,508.1, for a weekly decline of 0.5%. The broader Standard & Poor's 500 index shed 3.25 points, or 0.25%, to 1,314.78, down 0.4% for the week. The tech-heavy Nasdaq composite dropped 18.82 points, or 0.84%, to 2,218.93, a weekly loss of 0.7%.
NYSE breadth was decidedly negative, with 21 issues declining for every 13 advancing. Nasdaq breadth was 21-9 negative.
Investors continued to digest Thursday's unexpected drop in the Philadelphia Federal Reserve index. The measure of regional manufacturing activity dipped into negative territory for the first time since 2003.
The weak Philly Fed reading could dash traders' hopes the economy will slow at a moderate pace, some analysts say. "The soft landing scenario is put into question following the Philadelphia Fed Index shock, and the severe inter-market chart reactions appear to validate the number," says Roger Volz, chief technical analyst at Swiss American Securities.
Others say lower energy costs, among other factors, could help keep the economy afloat. "The recent drop in energy prices will free up some extra income for consumers, part of which will go towards goods consumption," says Goldman Sachs economist Andrew Tilton. "Easier financial conditions will also help cushion any deceleration."
Oil prices were on the downswing again Friday following a short-lived rebound. In the energy markets, November West Texas Intermediate crude oil futures fell $1.05 to $60.54 a barrel.
Among stocks in focus, Cablevision (CVC) reportedly granted stock options to a vice chairman after his death but backdated them to when he was alive.
Computer maker Hewlett-Packard (HPQ) was lower as CEO Mark Hurd was set to speak on the company's probe to ferret out the source of board leaks dating back to January 2005.
Retailer Target (TGT) says it will match rival Wal-Mart's (WMT) new, lower prices on generic drugs in the Tampa Bay area beginning immediately.
Chipmaker Texas Instruments (TXN) approved repurchase of an additional $5 billion of its common stock and raised its quarterly dividend.
Meanwhile, General Motors (GM) has reportedly made little progress toward an alliance with Renault and Nissan, with the automakers' top executives set to meet next week.
Coffee giant Starbucks (SBUX) raised the price on its drinks by five cents, or an average of 1.9%.
In earnings news, Nike (NKE) was higher after the shoemaker posted an 8.6% rise in first-quarter sales despite a 13% drop in quarterly profit.
The economic calendar was quiet Friday, before kicking off next week with existing home sales data due Monday.
European markets finished lower. In London, the Financial Times-Stock Exchange 100 index fell 74.4 points, or 1.26%, to 5,822.3. Germany's DAX index dipped 78.71 points, or 1.32%, to 5,883.32. In Paris, the CAC 40 index was down 66.37 points, or 1.27%, to 5,141.95.
Asian markets ended lower. Japan's Nikkei 225 slid 199.56 points, or 1.26%, to 15,634.67. In Hong Kong, the Hang Seng index slipped 19.32 points, or 0.11%, to 17,600.65. Korea's Kospi index skidded 18.41 points, or 1.35%, to 1,348.38.
Treasuries extended their advance amid speculation the Fed might be done tightening for the year. The 10-year note rose in price to 102-06/32 for a yield of 4.59%, while the 30-year bond climbed to 96-07/32 for a yield of 4.74%.