Stocks finished Friday narrowly mixed, as investors grappled with a tepid outlook from software company Microsoft Corp. and a rebound in first-quarter economic growth. The major indexes ended mixed for the week and for April.
Although Microsoft said higher revenue lifted earnings 16 percent in the latest quarter, the results missed analyst estimates. The miss and Microsoft’s lowered forecast sent its stock price down sharply, leading a broader decline in the Nasdaq composite index.
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The market found relief after the Commerce Department said gross domestic product bounced back to grow 4.8 percent last quarter after rising 1.7 percent in the fourth quarter. The gain was slightly less than economists’ prediction of 4.9 percent, which suggested the economy is expanding at a comfortable pace.
But while the GDP’s inflation component surged 3.3 percent — ahead of a 2.7 percent target — the news was offset by a Labor Department report that employment costs grew just 0.6 percent last quarter, the smallest rise since 1999 and behind views of 0.9 percent.
Art Hogan, chief market analyst for Jefferies & Co., said the day’s economic data was benign for inflation and the debate over interest rates, and noted a recovery among commodities and energy prices.
“With that as a backdrop, I’m not surprised to see” the Nasdaq down and little change on the other major indexes, Hogan said. “Of course, when you have a marquee name like Microsoft disappoint, it’s hard to sit up on good news.”
After four days of losses, crude oil futures rose on supply worries after the International Atomic Energy Agency said Iran defied the U.N. Security Council by enriching uranium.
Wall Street also weighed a dip in consumer confidence as soaring gasoline prices threatened discretionary spending. The University of Michigan’s April consumer-sentiment index slid 1.8 points to 87.4, while economists expected a 0.2-point drop.
The Dow Jones industrial average finished the seesaw session down 15.37 points, or 0.14 percent, while the broader Standard & Poor’s 500-stock index added 0.89 point, or 0.07 percent. The technology-rich Nasdaq composite index dropped 22.38 points, or 0.95 percent.
Erratic trading left the major indexes flat for the week, with the Dow gaining 0.17 percent and the S&P 500 off 0.05 percent. The Nasdaq lost 0.87 percent after Friday’s decline gave back most of its advance from earlier in the week.
For the month, however, the Dow jumped 2.32 percent and the S&P 500 added 1.22 percent, while the Nasdaq slid 0.74 percent. The Dow earned much of its April gains from recent indications that the Federal Reserve may soon pause or halt its series of interest rate hikes.
Analysts say the overall mood of the market has improved as government reports continue painting an uplifting picture of the economy. Now that the Fed may have boosted rates just enough to stifle demand, the market is looking for growth to gently taper in the latter half of the year, said Ed Keon, chief investment strategist for Prudential Equity.
“There’s still some danger that inflation could pick up, and higher energy prices could feed into that,” Keon said. “But overall, it does not look like substantial inflationary pressures are developing.”
Software giant Microsoft’s earnings saddled the tech sector, and its shares fell $3.10 to $24.15.
Citigroup Inc. gave the Dow some support after Piper Jaffray upgraded the financial services firm to “outperform,” citing improving margins and a pickup in the capital markets. Citigroup rose $1.80 to $49.95.
Prudential Equity’s upgrade of the banking sector lifted stocks elsewhere, with JPMorgan Chase & Co. adding $1.43 to $45.38, and Bank of America Corp. rising 88 cents to $49.92.
Chevron Corp. was the latest U.S. oil company to post a strong quarterly profit, which jumped 49 percent to $4 billion as high energy prices propelled its results. Chevron gained $1.04 to $61.02.
UnitedHealth Group Inc. rose $1.99 to $49.74 following a government report that the health insurer landed the biggest share of participants — about 27 percent of overall enrollment — in the new privately administered Medicare drug program.
Overseas, Japan’s Nikkei stock average lost 1.22 percent. Britain’s FTSE 100 fell 0.61 percent, Germany’s DAX index slid 0.95 percent and France’s CAC-40 was lower by 0.48 percent.