Gain Halts Friday Losing Streak
The end-of-week slump almost prevailed, even on a day with encouraging economic news, but stocks struggled higher on Friday, boosting some measures to records.
The Dow Jones industrial average rose 81.99 to 7,742.97, ending a string of eight straight losing Fridays. The roster of 30 blue-chip companies gained about 51 points early Friday, but then retreated to a 53-point deficit before bouncing back. For the week, however, the Dow lost 79.44 points.
Broad-market indicators also pushed higher on Friday after surrendering their early gains. The Russell 2000 index of smaller-company stocks closed at a record high for the 10th time in 13 sessions, ending a two-day losing streak.
Stocks drew an early boost from the bond market, where interest rates fell sharply after the release of two reports restoring some faith in the outlook for steady economic growth with low inflation.
And having grown increasingly leery about the blue-chip sector after a month of stumbles and abortive rebounds, investors used the early strength to take some money out of the market.
“We’ve had some mild acrophobia among the buyers,” said Richard A. Dickson, a technical analyst at Scott & Stringfellow in Richmond, Va.
“It may have something to do with the psychology that’s been rampant in the market - that we’re in the middle of a correction and it’s time to sell on the bounces. But that sentiment ran out of steam (on Friday),” particularly as bonds continued to strengthen, Dickson said.
Bonds rallied, sending interest rates tumbling, after the Labor Department reported that wholesale prices paid to factories and other producers rose just 0.3 percent in August. And even with the increase, the first monthly rise since December, wholesale prices have fallen this year at an annual rate of 2.2 percent.
The Commerce Department, meanwhile, reported that retail sales rose 0.4 percent in August, below analyst expectations.
The data came amid renewed uncertainty over whether the economic pace is vigorous enough to keep profits growing, but modest enough to keep inflationary pressures in check without a boost in interest rates by the Federal Reserve.
Advancing issues outnumbered decliners by more than a 5-to-2 margin on the New York Stock Exchange, where volume totaled a brisk 543.35 million shares as of 4 p.m., down from 574.57 million on Thursday.
The Standard & Poor’s 500-stock list rose 11.32 to 923.91, the NYSE composite index rose 6.24 to 483.30, and the Nasdaq composite index rose 9.47 to 1,649.33.
The Russell 2000 rose 4.16 to 440.09. Also returning to record territory was the small-company dominated American Stock Exchange composite index, which rose 5.47 to 672.31.
Overseas, Tokyo’s Nikkei stock average fell 1.7 percent, Frankfurt’s DAX index fell 3 percent, and London’s FT-SE 100 fell 0.1 percent.