Wall Street’s rally lost momentum amid profit-taking Friday afternoon, leaving stocks slightly lower for the day, but still allowing the Dow Jones industrial average and the Nasdaq composite index to post weekly gains for the first time since early March.
Investors were initially reassured by the University of Michigan’s consumer sentiment index, which rose to 95.8 in March from 95.4 in February, according to media reports on the index. The hike could mean consumers may be willing to spend more, boosting the economy.
A continued daily dose of strong economic reports and earnings could spark the buying Wall Street has been waiting for, according to Brian Belski, market strategist at Piper Jaffray.
“The market looks like it wants to rally into earnings and throughout the earnings season, and we could be back to focusing on inherent fundamentals like earnings and valuation,” Belski said. “We’re in a day-to-day, micro-reactive market that jumps on each little bit of news. If that news continues to be positive, we’re in good shape.”
The Dow Jones industrials slipped 5.85 points, or 0.1 percent, to 10,212.97, after a 170.59 point gain on Thursday.
Broader stock indicators were also modestly lower. The Standard & Poor’s 500-stock index fell 1.13 points, or 0.1 percent, to 1,108.06, and the Nasdaq composite fell 7.15 points, or 0.4 percent, to 1,960.02. Both indexes enjoyed major gains the previous day.
For the week, the Dow climbed 26.37 points, or 0.3 percent, and the Nasdaq composite rose 19.55 points, or 1.0 percent, while the S&P 500 lost 1.71 points, or 0.2 percent. The Dow and Nasdaq composite halted a steep two-week decline, mostly due to strong gains on Thursday, while the S&P 500 saw its third straight losing week.
The Commerce Department report on consumer income and spending, while not entirely positive, was still good enough to support Michigan’s findings. Consumer income was up 0.4 percent in February, up from the 0.3 percent rise reported in January and slightly better than economists expected.
However, consumer spending rose 0.2 percent, down from the 0.5 percent gain in January. While less than Wall Street expected, consumer spending still managed to make gains, analysts said, showing that the recent economic troubles have not stopped consumers from making purchases.
The biggest coming indicator, however, is next week’s payroll report, which analysts are hoping will be better than expected.
“If we get any kind of upside surprise in the jobs report, this market’s really going to take off,” Belski said.
Until then, however, the stock markets will likely remain somewhat stagnant unless another major, unexpected world event occurs.
“The market is going to be a wait-and-see pattern until we get payroll and earnings,” said Keith Keenan, vice president of institutional trading at Wall Street Access. “Short-term, the market does appear to be somewhat oversold, so there’s probably not too much more to expect on the downside, unless earnings are disappointing.”
ETrade Financial Corp. gained 40 cents to $13.10 after the company was added to the S&P 500 index. The online brokerage and banking company was also upgraded to “strong buy” by Raymond James.
Hewlett-Packard Co. has filed suit against rival computer maker Gateway Inc., according to media reports, alleging infringement of six patents covering a variety of personal computer technologies. H-P was down 3 cents at $22.36, while Gateway dropped 14 cents to $5.26.
EchoStar Communications Corp. posted earnings that came in 8 cents below analysts’ estimates, as well as lower-than-expected revenue. EchoStar slumped 94 cents to $33.70.
Advancing issues outnumbered decliners by nearly 5 to 4 on the New York Stock Exchange, where volume came to 1.31 billion shares, compared to 1.48 billion at the same point Thursday.
The Russell 2000 index of smaller companies rose 1.39 points, or 0.2 percent, to 572.92.
Overseas, Japan’s Nikkei stock average jumped 2.1 percent. In afternoon trading, Britain’s FTSE 100 closed down 0.4 percent, France’s CAC-40 gained 0.6 percent for the session and Germany’s DAX index rose 0.3 percent.