April 26, 2008 in Business

Markets manage back-to-back winning weeks

Associated Press The Spokesman-Review
 

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NEW YORK – Wall Street ended its second straight winning week with a moderate advance Friday, overcoming concerns about consumer confidence and inflation.

After slumping early in the session in response to weak consumer confidence and a spike in oil prices, investors seemed to turn their attention to broader signs, including the week’s generally satisfactory earnings reports, that suggested government efforts to steady the economy appear to be working. That shift in focus sent stocks up late in the day.

Although the Reuters/University of Michigan consumer sentiment index came in with its lowest reading since the early 1980s, Tom Lydon, president of Global Trends Investments in Newport Beach, Calif., said companies’ first-quarter reports convinced investors that “overall, things aren’t all that bad.”

“I think a lot of people went into the weekend feeling they didn’t want to be on the short side,” Lydon said.

The consumer sentiment index fell to 62.6 for April from 69.5 a month earlier, reflecting Americans’ concern about rising energy and food prices.

While consumer spending represents about 70 percent of the economy, UBS equities strategist David Bianco said “it’s the wrong thing to be looking at to gauge the prospects” for the Standard & Poor’s 500 companies.

“Business activity is strong in the U.S. and especially globally,” he said. “That’s far more important.”

The Dow Jones industrial average gained 42.91, or 0.33 percent, to 12,891.86, after falling more than 100 points earlier in the session. The Dow closed the week with a gain of less than 1 percent.

The Nasdaq composite index, depressed by disappointment with a Microsoft Corp. forecast, fell 5.99, or 0.25 percent, to 2,422.93, after dropping as much as 1.6 percent during the session.

But advancers were well ahead of decliners in the broader Nasdaq Stock Market, and for the week, the Nasdaq gained 1.4 percent.

Japan’s Nikkei stock average closed up 2.28 percent. Britain’s FTSE 100 rose 0.67 percent, Germany’s DAX index advanced 1.10 percent, and France’s CAC-40 rose 0.99 percent.


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