NEW YORK (CNN/Money) -
U.S. stocks ended the day and the week little changed Friday, but not without great turmoil in between, as investors sifted through a pile of conflicting economic and corporate news.
On Friday, the Nasdaq composite (up 8.94 to 1855.03, Charts), the Dow Jones industrial average (up 11.79 to 9471.55, Charts) and the Standard & Poor's 500 (up 2.21 to 1018.63, Charts) index all closed slightly higher.
For the week, the major indexes ended just below where they began. It was the first down week in four for the Nasdaq and the S&P 500 and the first in six for the Dow industrials.
So far, the market has managed to avoid the historic pitfalls of September, a month that tends to be pretty bleak for all three major indexes. But how that plays out in the next few weeks will depend largely on the perception of both the economic news and third-quarter results.
"September tends to be the take-a-breather month, historically," said Michelle Clayman, chief investment officer at New Amsterdam Partners. "I would guess the market over the next few weeks will be bound to a narrow trading range as companies begin to report earnings."
Although third-quarter earnings are expected to be better by as much as 15 percent on a year-over-year basis, with expectations for a profit recovery so high, solid earnings may not be enough to propel stocks higher, Clayman said. "Until both the economic and corporate news start moving more consistently higher, you won't see another big move up for stocks."
Before the bell Monday, earnings are due from a few companies, including General Mills (GIS: down $0.03 to $47.21, Research, Estimates), Kroger (KR: up $0.09 to $19.00, Research, Estimates) and Pier 1 Imports (PIR: up $0.44 to $19.62, Research, Estimates).
But trading is more likely to be influenced by the many economic reports due before the bell.
Business inventories for July are expected to be down slightly from June, according to Reuters estimates. Industrial production and capacity utilization for August are expected to be little changed from the previous month. The New York Empire State index for September is forecast to show a slight rise from August. While the index doesn't get the same headlines as the other reports, it tends to be a decent market mover.
Stocks spent Friday morning and early afternoon in the red, as investors digested lackluster reports on retail sales and consumer sentiment, not to mention Oracle's mixed earnings. But the selling pressure let up as the session progressed, with mutual fund managers and other investors opting to dip their toes in at the end of the day.
The turnaround was fostered by gains in technology for the most part. Among the notables: Microsoft (MSFT: up $0.50 to $28.34, Research, Estimates) recovered from an earlier slide after it doubled its dividend but perhaps didn't raise it as much as some had hoped. Sycamore Networks (SCMR: up $1.07 to $5.20, Research, Estimates) rallied strongly in active trade, lifting other networkers on news that it had won a part in a multimillion-dollar government deal.
"I think a week of profit taking is fairly healthy after the kind of run we've seen," said Bryan Piskorowski, a market analyst at Wachovia Securities.
Dow stock Alcoa (AA: up $0.95 to $29.18, Research, Estimates) gained almost 3.4 percent and was the Dow's best performer on some aluminum industry news. French producer Pechiney (PY: Research, Estimates) finally agreed to a $4.48 billion buyout offer from sector leader Alcan (AL: up $3.82 to $38.81, Research, Estimates), after turning the company down on two previous occasions.
Additionally, a number of telecom and networking stocks were very active on news that the $877 million Department of Defense GIG-BE project has been awarded to a number of companies. The project is an all-optical network that would link Defense Dept. sites around the world.
Shares of Sycamore (SCMR: up $1.07 to $5.20, Research, Estimates) rallied 25.9 percent on news that the firm was one of the four companies chosen to participate. However, Corvis (CORV: down $0.51 to $1.47, Research, Estimates) stock lost 25.8 percent after the company failed to be included. Corvis topped the Nasdaq's most-actives list.
In addition, Qualcomm's (QCOM: up $1.82 to $42.82, Research, Estimates) gains spread to some other telecoms. The stock was up all day following a Merrill Lynch upgrade to "buy" from "neutral" before the opening bell.
Before the opening bell, business software maker Oracle (ORCL: down $0.43 to $12.55, Research, Estimates) reported quarterly earnings of 8 cents per share, in line with estimates and up from a year earlier. However, the company's sales came in slightly lower than expected. In addition, Oracle, which is currently in the midst of a hostile bid for rival PeopleSoft (PSFT: up $0.07 to $19.10, Research, Estimates), said its new software license sales slipped 5 percent from a year earlier. The stock tumbled 3.3 percent and was the Nasdaq's second most-active issue.
Shares of Walt Disney (DIS: down $0.44 to $20.24, Research, Estimates) fell 2.1 percent, which some analysts said was in response to the surprising death of actor John Ritter, who was the star of one of the ABC Television Network's most-successful new shows, "8 Simple Rules for Dating My Teenage Daughter."
Market breadth was positive. Advancers beat decliners almost 3 to 2 on the New York Stock Exchange, where 1.23 billion shares traded. On the Nasdaq, winners narrowly edged loser as 1.69 billion shares changed hands.
The sour economic news propelled Treasury prices in the morning. The stock turnaround cut into their gains, but they remained higher nonetheless. The 10-year note yield fell to 4.25 percent from 4.31 percent late Thursday. The dollar was weaker against the euro and the yen.
NYMEX light sweet crude oil futures fell 55 cents to settle at $28.40 a barrel. COMEX gold fell $3.90 to settle at $376.90 an ounce.