Wall Street ended a bewildering week Friday with a mixed performance, a fitting end to a week that saw investors selling broadly on interest rate fears and buying blue chips defensively.
Technology stocks again bore the brunt of investors’ anxiety, suffering after Nokia released a disappointing earnings report. That sent the Nasdaq composite index falling while the Dow Jones industrial average and Standard & Poor’s 500-stock index, beneficiaries of investors’ migration toward stalwart stocks, posted solid gains.
Analysts said the market got some support from a jump in new housing construction last month. But analysts said concerns about higher rates, which grew out of a negative inflation report, were paramount in investors’ minds.
“We’re being reactive instead of proactive, but there’s still good things to come,” said Brian Belski, market strategist at Piper Jaffray.
At the close, the Dow 30 index was up 54.51 points, or 0.5 percent, at 10,451.97.
Broader stock indices were mixed. The S&P 500 index was up 5.77 points, or 0.5 percent, at 1,134.61, while the Nasdaq slipped 6.43 points, or 0.3 percent, to 1,995.74 after dropping 22.68 on Thursday.
For the week, the Dow gained 0.1 percent, the S&P 500 slipped 0.4 percent and the Nasdaq tumbled 2.8 percent.
The Commerce Department reported a strong 6.4 percent rise in new housing construction for March, the biggest jump in 10 months. However, this was offset by a Federal Reserve report which said that production in America’s industrial sectors fell 0.2 percent after two months of gains, a far cry from the 0.3 percent hike economists expected.
But with surprisingly strong economic data this week, including a jump in retail sales, investors became concerned that the economy would grow too quickly, prompting the Federal Reserve to intervene sooner than expected with a rate hike to stave off inflation. And while many companies have been releasing good earnings reports, they were already factored into the market and so had little effect on the week’s trading.
Until another strong market driver becomes apparent, investors will continue to move toward blue chips and other defensive positions, analysts said.
“We made a lot of money last year and we’re trying to hang on to that performance,” Belski said.
The technology sector saw more bad news Friday after a disappointing session Thursday. Nokia led the way with lower year-over-year profits, a 15 percent drop in mobile phone sales, warnings about second-quarter earnings and a gloomier 2004 outlook. Nokia tumbled $1.44 to $14.61.
Sun Microsystems Inc. slipped 16 cents to $4.26 after a greater-than-expected loss for the quarter. The business computer and software maker recently announced a series of job cuts and other belt-tightening measures.
IBM Corp. met Wall Street expectations with its earnings, released after Thursday’s session, and exceeded its revenue forecasts for the quarter. However, the company was hesitant to provide a 2004 outlook. IBM plunged $1.69 to $92.28.
E-Trade Financial Corp. gained 4 cents to $12.32 after beating estimates by 3 cents per share due to strong growth in core online banking and brokerage businesses.
The Russell 2000 index of smaller companies was up 3.07 points, or 0.5 percent, at 583.37 by the close. Advancing issues outnumbered decliners by nearly 3 to 1 on the New York Stock Exchange, where volume came to 1.49 billion shares, compared with 1.56 billion on Thursday.
Overseas, Japan’s Nikkei average gained 0.2 percent. Britain’s FTSE 100 closed up 0.7 percent, France’s CAC-40 rose 0.8 percent for the session and Germany’s DAX index added 0.7 percent.