Stocks manage gains
Major gauges bounce back at the end of tough session, thanks to lower oil, higher techs.
NEW YORK (CNNMoney.com) - Stocks ended higher Friday, as investors showed resilience and stepped back in at the end of a tough session, marred by a jump in the trade deficit and some broad-based profit taking.
For the week, the Dow and S&P managed mild gains, while the Nasdaq closed a bit lower.
The Dow Jones industrial average (up 35.70 to 10,919.05, Charts), the broader Standard & Poor's 500 (up 3.21 to 1,266.99, Charts) and the Nasdaq composite (up 6.01 to 2,261.88, Charts) all added around 0.3 percent.
All three major gauges had sported losses throughout the mid afternoon, before finding a little momentum near the close.
The tech sector helped spearhead the recovery, with chip and Internet shares trimming their losses. Homebuilding and financial stocks also trimmed losses, while the oil sector turned positive.
The recovery in the market in the afternoon is indicative of the underlying positive sentiment that's essentially been supporting stocks since the start of the year, said Ted Weisberg, a New York Stock Exchange floor trader at Seaport Securities. In addition, technical market factors may have caused the morning's selloff, he said.
At the same time, the choppiness reflects the conflicting influences that have kept stocks in a broad range.
"Overall, economic news continues to be positive, corporate earnings continue to come in well and oil prices have come down this week," Weisberg said. "At the same time, you have interest rates, inflation and geopolitical issues that represent the unknown."
"That is the counterbalance that sets up this range-bound market," he added.
That's been the case for most of February, which is typically a choppy month. Stocks managed a big rally Wednesday, but other than that the market has struggled on confusion about the health of the economy and corporate earnings in the year ahead, as well as future Fed policy.
Incoming Fed chairman Ben Bernanke speaks before Congress Wednesday, and anticipation about what he might say may have played a role in any weakness Friday morning.
The week ahead is likely to by choppy, said Tom Schrader, managing director of listed trading at Legg Mason. "We're probably going to see some near-term weakness," he added.
On the move
Market breadth was mixed. On the New York Stock Exchange, winners beat losers by a narrow margin on volume of 1.70 billion shares. On the Nasdaq, decliners topped advancers eight to seven on volume of 2.06 billion shares.
A variety of blue chips moved higher after a tough morning, with 21 out of 30 Dow stocks rising.
A standout to the downside was Pfizer (down $0.66 to $25.68, Research), which lost 2.5 percent after warning that 2006 earnings per share will fall slightly from 2005 and will miss Wall Street's forecasts. The company also issued a 2007 forecast that is above current expectations, but investors focused on the 2006 outlook.
A number of widely-held tech stocks bounced back after sliding through the session.
The Philadelphia Oil Service (Charts) sector index jumped 0.9 percent, bouncing back after several sessions of declines.
Oracle (unchanged at $12.69, Research) ended unchanged, after gyrating throughout the session. Late Thursday, the company forecast fiscal third-quarter and fourth-quarter revenue growth in a range that was above analysts' estimates. The company also said it was cutting 2,000 jobs as it completes the purchase of software maker Siebel Systems.
'05 trade gap hits record
Investors also eyed the morning read on the U.S. deficit.
The December trade gap surged to $65.7 billion, above forecasts, bringing the deficit for the full year to $725.8 billion, a record.
The deficit report gave an initial lift to Treasury prices, but the market turned around by midday. On Thursday, the 30-year bond auction, the first in nearly 5 years, drew a solid response.
The 10-year note fell, raising the yield to 4.58 percent from 4.54 percent late Thursday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for March delivery fell 78 cents to settle at $61.84 a barrel on the New York Mercantile Exchange.
In currency trading, the dollar rose versus the euro and fell versus the yen.
COMEX gold for April delivery fell $14.30 to settle at $550.20 an ounce.
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