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Markets & Stocks
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Big week on Wall Street
Stocks have mixed day but make gains for the week to bring major indexes to multi-month highs.
June 6, 2003: 5:13 PM EDT
By Meghan Collins, CNN/Money Staff Writer

NEW YORK (CNN/Money) - U.S. stocks ended mixed Friday, but up significantly for the week, as investors couldn't fight off urges to take profits after an early rally on a better-than-expected jobs report and a takeover bid by business software maker Oracle.

The Nasdaq composite (down 18.59 to 1627.42, Charts) slipped 1.1 percent, while the S&P 500 index (down 2.38 to 987.76, Charts) lost 0.2 percent. But Dow Jones industrial average (up 21.49 to 9062.79, Charts) managed to eke out a small gain of 0.2 percent.

All three indexes rallied strongly in the morning on news that the number of jobs lost in May was a great deal lower than economists had expected, and on a surprise bid by Oracle to buy PeopleSoft. But they pulled back in afternoon trading as some investors couldn't resist the temptation to take profits after the surge and ahead of the weekend.

Although the session ended mixed, all three indexes ended their second straight week significantly higher. The Dow rose 2.4 percent and managed to close above 9,000 for three straight days. The Nasdaq jumped 2 percent, while the S&P clocked a 2.5 percent gain for the week. The major markets have all been up in five out of the past six weeks.

"It's hard to rationalize this from a fundamental perspective, but I don't think the market's trading on fundamentals -- it's trading on emotions," said Davis Briggs, head of equity trading at Federated Investors. "The magic to this market is that there are no sellers."

Despite mixed economic reports and few signs of growth in the economy, investors have jumped back into stocks in recent months, driven by hopes of better times in the second half of the year. The resurgence has helped the Dow reach its highest point in more than nine months, and the Nasdaq to hit levels not seen for more than a year. In recent days, the S&P has also jumped to its top height since July 2002.

Next week, investors will be looking for signs of recovery in economic news, once again.

Monday, the government plans to release data on wholesale inventories for April. Economists, on average, expect that inventories rose by 0.2 percent after a 0.5 percent jump in March, according to Briefing.com.

During the remainder of the week, investors are likely to focus on the Fed's Beige Book, May retail sales, and April business inventories, trade figures, producer prices, and consumer sentiment.

PeopleSoft rallies on Oracle bid

Early Friday morning Oracle (ORCL: down $0.27 to $13.09, Research, Estimates), the world's leading business software maker, said it had made an offer to buy smaller rival PeopleSoft (PSFT: up $2.71 to $17.82, Research, Estimates) for $5.1 billion in cash, or about $16 a share. The news sent PeopleSoft's stock soaring 18 percent.

Earlier this week, PeopleSoft said it was about to buy J.D. Edwards (JDEC: up $0.41 to $13.20, Research, Estimates), another, smaller maker of business software, in a stock deal worth about $1.7 billion. But the Oracle offer could derail this deal, as Oracle itself said that if its bid for PeopleSoft is successful, it would reexamine the J.D. Edwards acquisition. Shares of J.D. Edwards still rallied 3.2 percent.

News of the Oracle offer, especially on the heels of the J.D. Edwards deal Monday, sent bullish signals through the entire business software sector and the broader technology sector as well. Signs of a recovery in merger and acquisition activity in technology could be perceived as yet another signal that an overall business recovery might happen in the second half.

Reinforcing such thinking, Oracle also said Friday that it would report earnings per share of 14 or 15 cents in its fiscal fourth quarter, which ended last month. That is at or slightly above the 14 cents a share consensus forecast of analysts surveyed by earnings tracker First Call. The company also earned 14 cents a share a year earlier.

The announcement came on the heels of what was seen as a generally positive mid-quarter update by Intel (INTC: down $0.08 to $21.76, Research, Estimates) late Thursday. In it, the world's biggest chipmaker narrowed its sales forecast range for the second quarter but held the mid-point of the range steady. While investors appeared generally pleased by the report in morning trading, the stock succumbed to some profit taking late in the day, ending a bit lower.

Jobs report aids rally

The eagerly awaited May jobs report showed few surprises and mostly positive ones. The unemployment rate rose to 6.1 percent last month, as had been expected, but the economy lost only 17,000 jobs; a loss of 39,000 had been forecast.

This led Wall Streeters to believe that, perhaps, the labor market might be on its way to recovery, too -- first the number of job cuts would shrink, then, it's hoped, employers might do some real hiring.

The breadth of the market was negative on strong volume. Losing stocks beat out winners by a six-to-five margin on the Nasdaq, where 2.9 billion shares traded. On the New York Stock Exchange, advancing stocks barely edged past decliners, as 1.8 billion shares changed hands.

Bonds turned mostly higher. The 10-year note rose 1/32 of a point in price, pushing its yield down to 3.34 percent. The dollar was higher against the yen and the euro.

Among key commodities, gold tumbled $5 to $364.50 an ounce in New York, where light crude oil for July delivery rose 54 cents to $31.28 a barrel.

Stock markets in Europe closed with gains. Most markets in Asia also ended higher overnight.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.