Stocks mixed on earnings reports
Stocks closed mixed but mostly higher Friday, with Caterpillar Inc.’s lackluster results dragging down the Dow Jones industrials while strong earnings from Google Inc. led a broader rally. The major indexes were mixed for the week.
Friday’s skittish session closed out a turbulent week for Wall Street as troubling economic data renewed fears about inflation, overshadowing mostly positive third-quarter profit reports from the nation’s biggest companies. Investors scouring for signs of the market’s direction sent the Dow climbing more than 1 percent Wednesday, but took back the gains a day later.
Although corporate earnings have so far been favorable, the market is still battling three major headwinds — rising interest rates, inflation and high energy prices, said Michael Sheldon, chief investment strategist at Spencer Clarke LLC.
“Right now, I think the market needs a catalyst in order to get out of this difficult environment,” Sheldon said. “Hopefully if oil prices continue to decline and move back into the mid $50s, that could turn sentiment more positive on Wall Street.”
At the close of trading, the Dow fell 65.88, or 0.64 percent, to 10,215.22.
Meanwhile, the broader stock indicators advanced. The Standard & Poor’s 500 index added 1.79, or 0.15 percent, to 1,179.59, and the Nasdaq composite index jumped 14.10, or 0.68 percent, to 2,082.21.
For the week, the Dow fell 0.7 percent and the S&P 500 lost 0.59 percent; the Nasdaq, however, rose 0.84 percent. Trading could be volatile again next week as another wave of companies release their quarterly results.
Bonds gained ground, with the yield on the 10-year Treasury note sliding to 4.39 percent from 4.48 percent Thursday. The dollar was mixed against most major currencies, while gold prices edged lower.
Crude oil lingered below $60 a barrel most of the day following recent government reports indicating U.S. petroleum inventories have been expanding. However, a barrel of light crude added 61 cents to settle at $60.63 on the New York Mercantile Exchange.
But with oil falling and recent data showing higher prices have so far been limited to the energy industry, Wall Street may question whether the Federal Reserve is raising interest rates too high. Comments from three Fed officials this week signaled that the central bank remains steadfast on keeping its rate-tightening campaign.
“They have been repeatedly saying they’re going to continue their mission of trying to restrain inflation,” said Paul McManus, senior vice president at Independence Investments LLC. “They want to make sure oil inflation does not spread into core inflation.”
Advancing issues outpaced decliners by nearly 2 to 1 on the New York Stock Exchange, where volume of 1.46 billion shares led the 1.43 billion shares traded at the same point Thursday. Volume was expected to be higher from expiration of options and futures contracts.
The Russell 2000 index of smaller companies climbed 5.19, or 0.83 percent, to 632.73.
Overseas, Japan’s Nikkei stock average gained 0.07 percent. Britain’s FTSE 100 slid 0.43 percent, Germany’s DAX index dropped 0.53 percent, and France’s CAC-40 was lower by 0.55 percent.