A late-day sell-off left stocks modestly lower Friday, as weakening consumer confidence and a rise in wholesale prices prompted investors to take profits and pause from Wall Street’s recent rebound. The major indexes finished the week higher.
The market’s losses were also fed by soaring energy prices and a meager profit forecast from Dell Inc. Also, the upswing in the producer price index — seen as a precursor to consumer-level inflation — once again sparked concerns about more interest rate increases, a day after one Federal Reserve member said the central bank was nearing an end to its string of rate hikes.
“The PPI number is one data point that suggests the Fed is going to go further,” said Russ Koesterich, senior portfolio manager at Barclays Global Investments. With six weeks before the next Fed policy meeting, “the market is going to pay increasing attention to the implication of [economic] data for inflation.”
Investors digested a 0.3 percent rise in January’s PPI, which grew faster than economists’ 0.2 percent target. Core PPI — excluding volatile energy and food prices — added 0.4 percent, the Labor Department said.
The Dow Jones industrial average finished the day down 5.36 points, or 0.05 percent, while the broader Standard & Poor’s 500-stock index lost 2.14 points, or 0.17 percent. The technology-rich Nasdaq composite index fell 12.27 points, or 0.53 percent.
Friday’s decline was a respite from this week’s run-up, which carried the Dow Jones industrials about 200 points higher to close at a fresh 4 1/2-year high on Thursday. For the week, the Dow rose 1.8 percent, the S&P 500 added 1.6 percent and the Nasdaq was higher by 0.91 percent.
Whether stocks can continue moving up is largely pegged on the Fed’s opinion of the economy and inflation, Koesterich said, adding that he’s monitoring Wall Street’s reaction to lower oil prices and the effect of last month’s unseasonable weather.
“Things have been very distorted by how warm the weather was in January,” Koesterich said. “We’re trying to get a handle on how it impacted the economy. It helped retail spending and housing starts, but has hurt energy prices.”
Crude futures rallied on threats of political unrest in the oil-rich nation of Nigeria, sending a barrel of light crude surging on the New York Mercantile Exchange. Bonds rose, with the yield on the 10-year Treasury note falling to 4.54 percent from 4.59 percent late Thursday. The dollar was mostly lower against most major currencies.
More dampening economic news came from the University of Michigan, which said its consumer-sentiment index for February tumbled 3.8 points to 87.4, well below the consensus estimate of 91.
Dell said its fourth-quarter profit surged 52 percent on computer sales to businesses and overseas customers, but a weak first-quarter outlook prompted Banc of America to lower its rating to “neutral” and sent shares sliding $1.58 to $30.38.
Sirius Satellite Radio Inc. posted a threefold jump in quarterly revenue on strong subscriber growth, but its deficit widened as customer-acquisition spending more than doubled. Sirius lost 39 cents to $5.26.
Rival XM Satellite Radio Holdings Inc. also said increased marketing costs further depressed its quarterly loss. XM’s stock was also rattled by the sudden departure of a board member, who warned about the company’s future. XM dropped $2.41 to $21.57.
Electronics retailer RadioShack Corp. saw its quarterly earnings plunge 62 percent and said it will close between 400 and 700 underperforming stores and two distribution centers in an effort to stage a turnaround. RadioShack dropped $1.67 to $19.08.
Time Warner Inc. fell 19 cents to $17.78 following The Wall Street Journal’s report that billionaire financier Carl Icahn has shelved plans to split up the media conglomerate after failing to garner shareholder support.
KeySpan Corp. confirmed a New York Times report that it has put itself up for sale. The natural gas utility is seeing bids for more than $6.5 billion, and interest from Consolidated Edison Inc. and London’s National Grid could start a bidding war, according to the Times. KeySpan jumped $4.23 to $40.41.
The market reversed course at midday, with advancing issues overtaking decliners by 9 to 7 on the New York Stock Exchange. NYSE volume of 1.57 billion shares lagged the 1.66 billion shares traded on Thursday. Trading activity slowed toward the end of the session as traders left early for the President’s Day weekend. U.S. stock markets will be closed on Monday for the holiday.
Overseas, Japan’s Nikkei stock average sank 2.06 percent. Britain’s FTSE 100 gained 0.3 percent, Germany’s DAX index rose 0.11 percent and France’s CAC-40 was higher by 0.54 percent.