Wall Street wavers after spending data
NEW YORK » Wall Street closed out a winning week with a narrowly mixed performance yesterday after the government reported that Americans' spending rose in April to keep pace with rising costs.
Investors who sent stocks higher for three straight sessions turned cautious after the Commerce Department said personal spending rose 0.2 percent last month and personal income rose 0.2 percent. The department also said inflation at the personal spending level, after stripping out food and energy costs, ticked up in April by a tame 0.1 percent.
The readings were in line with the market's expectations, and supported the notion that high commodities costs are not yet causing a sharp pullback in spending or lifting prices for other goods. Meanwhile, the technology sector got a lift after computer maker Dell Inc. and chip maker Marvell Technology Group Ltd. posted stronger-than-expected quarterly results.
But Americans still face rising costs for necessities such as groceries and gasoline - a serious drag on consumer spending which accounts for more than two-thirds of the U.S. economy.
Investors will get a clearer picture next week when a number of key economic reports will be released. Analysts believe strong data on job growth and manufacturing will boost stocks - or, if the reports are disappointing, deliver a setback to the markets.
"It is now all about the economy, and I think we're going to get numbers that might be a requiem for the recession forecasters," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners. "Not to say the numbers will be great, but not as bad as people might have anticipated."
The Dow Jones industrial average fell 7.90, or 0.06 percent, to 12,638.32. The Standard & Poor's 500 index added 2.12, or 0.15 percent, to 1,400.38, and the Nasdaq composite index rose 14.34, or 0.57 percent, to 2,522.66. The Russell 2000 index of smaller companies rose 2.73, or 0.37 percent, to 748.28.
Advancing issues outnumbered decliners by about 8 to 7 on the New York Stock Exchange, where consolidated volume came to 3.72 billion shares, compared to 3.81 billion shares on Thursday.
Government bonds edged up yesterday. The yield on the
10-year Treasury note, which moves opposite its price, fell to 4.06 percent in late trading from 4.08 percent on Thursday.
Crude oil futures, while down from their recent record levels, settled up 73 cents at $127.35 a barrel in erratic trading on the New York Mercantile Exchange.
"We've hit a level where you're starting to see demand destruction," said John Massey, portfolio manager at AIG SunAmerica Asset Management.
The dollar fell against other major currencies, while gold prices rose.
In corporate news, the technology-dominated Nasdaq got a boost after Dell, the world's second-largest seller of personal computers, issued a profit report late Thursday that was stronger than analysts expected due to growth in Asia and robust sales of notebook computers.
Dell shares jumped $1.25, or 5.7 percent, to $23.06, and injected some optimism into Wall Street that foreign economies are helping many companies weather the weak U.S. market.
Marvell Technology swung to a larger-than-expected profit in the quarter ended May 3, and its revenue also beat analyst forecasts. Shares rose $3.28, or 23.3 percent, to $17.36.