Stocks drifted to a mixed finish Friday, as Wall Street worried about the impact of high crude oil prices on the nation’s trade deficit and Intel Corp.’s bullish sales forecast prompted some profit-taking.
The market’s major stock indexes closed the week mixed.
Investors were concerned that high oil prices, which helped boost the April trade deficit by 6 percent, would further weigh on the economy and drag on stocks. According to the Commerce Department, the trade deficit rose to $56.96 billion from $53.56 billion in March. While that was a smaller increase than expected, oil imports rose to the second-highest level on record — enough to raise concerns that high oil prices would weigh on consumer spending as well as business costs.
Despite Federal Reserve Chairman Alan Greenspan’s relatively positive assessment of the economy on Thursday, Wall Street’s economic worries were not assuaged, and many investors were hoping for better news from second-quarter earnings and, ideally, stronger economic data in the weeks ahead.
“The values are no longer there, the economy is slowing, interest rates are taking their toll and are starting to slow economic growth,” said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn. “The market is not going to be as resilient; gains aren’t as sustainable, action is choppier.”
The Dow Jones industrial average was up 9.61 points, or 0.1 percent, at the close, while the Standard & Poor’s 500-stock index was down 2.82 points, or 0.2 percent. The tech-rich Nasdaq composite index dropped 13.91 points, or 0.7 percent.
The week’s trading was marked by a lack of hard economic news and continued uncertainty over the health of the economy, despite Greenspan’s forecast. For the week, the Dow rose 0.5 percent, the S&P 500 climbed 0.2 percent and the Nasdaq composite lost 0.4 percent.
Investors’ fears were heightened as crude futures held on to a large part of Thursday’s sharp gains. A barrel of light crude settled at $53.54, down 74 cents on the New York Mercantile Exchange. Crude futures were up $1.74 on Thursday.
Friday’s economic news stole momentum from Intel mid-quarter update, in which the company boosted its revenue forecasts. Intel is seen as a barometer for the rest of the technology sector, but the widely expected news failed to lift its stock.
Intel said strong demand, particularly for notebook computer processors, will result in higher quarterly sales. Shares of Intel, however, fell 72 cents to $26.98.
“A lot of people have been talking about how they had been expecting Intel to come out last night and refine guidance upward,” said Sam Stovall, chief investment strategist at Standard & Poor’s. “Buy on the rumors, sell on the fact.”
Fellow Dow industrial General Motors Corp. surged 8.5 percent, or $2.70, to $34.51 after The Wall Street Journal reported the United Auto Workers were willing to work with the struggling automaker to help rein in costs.
Citigroup Inc. lost 4 cents to $47.64 after the nation’s largest financial institution announced it will pay $2 billion to settle lawsuits related to its handling of the Enron scandal. The money will go to investors who bought Enron stock and bonds, which Citigroup managed. The company said it had enough in its legal reserve to cover the costs.
Brocade Communications System Inc. said the Securities and Exchange Commission has launched a formal investigation in to the company’s accounting of stock options. The probe, started as an informal inquiry, now allows the SEC to subpoena the company for information. Brocade was unchanged at $4.03.
Toys R Us Inc. rose 5 cents to $26.37 after the struggling toy retailer posted a wider-than-expected loss for the quarter, missing Wall Street’s estimates by 16 cents per share. Shareholders will vote later this month on a plan to take the company private.
Overseas, Japan’s Nikkei average rose 1.3 percent. In Europe, Britain’s FTSE 100 was up 0.4 percent, France’s CAC-40 climbed 0.7 percent and Germany’s DAX index gained 0.5 percent.
