Slight gains wrap up rough week
NEW YORK – U.S. stocks eked out modest gains on Friday, but posted losses for the week, which was dominated by fears that the Federal Reserve may begin pulling back stimulus later this year.
After a very choppy trading session, the Standard & Poor’s 500 index gained 4.24 points, or 0.3 percent, to end at 1,592.43. It fell 2.1 percent for the week.
The Dow Jones industrial average rose 41.08 points, or 0.3 percent, to 14,799.40, leaving it down 1.8 percent for the week.
The Nasdaq composite fell 7.39 points, or 0.2 percent, to end at 3,357.25, leaving it with a weekly loss of 1.9 percent. The tech-heavy index was hurt by a 9.3 percent drop in shares of Oracle Corp. The tech bellwether delivered a disappointing quarterly earnings report late Thursday.
Friday’s gains came after the Wall Street Journal suggested that investors may be misreading the Federal Reserve’s message. Jon Hilsenrath, the Journal’s Fed watcher, wrote a blog post saying that markets may be overlooking several dovish signals sent by Fed Chairman Ben Bernanke.
U.S. stocks, along with commodities and bonds, fell sharply in the previous two sessions after Bernanke said at a news conference Wednesday that the central bank may scale back its bond-buying later this year. While the Fed may do so, Hilsenrath wrote, it will be a long time before the Fed raises short-term interest rates.
The Dow’s slide on Wednesday and Thursday – a drop of about 560 points or 3.66 percent – was its worst two-day drop since the two sessions ended Nov. 1, 2011.
Investors also absorbed remarks from St. Louis Federal Reserve President James Bullard, who explained on Friday why he voted against the Fed decision. Bullard said the Fed’s decision to lay out its plans to taper bond buys was badly timed. The Fed should have waited “for more tangible signs” of economic improvement and a halt in the downward direction for inflation, according to Bullard.