Stocks head to the beach
Major gauges end lackluster session lower ahead of a long weekend; final tallies for the second quarter.
NEW YORK (CNNMoney.com) -- Stocks wound down what has been a rocky second quarter for investors on a lackluster note Friday.
The Dow Jones Industrial average (down 40.58 to 11,150.22, Charts) fell 0.4 percent, while the broader S&P 500 index (down 2.67 to 1,270.20, Charts) and the Nasdaq composite (down 2.29 to 2,172.09, Charts) posted slimmer losses on the last business day of the quarter.
The tech-fueled Nasdaq tumbled 7.2 percent during the second quarter, while the S&P 500 lost 1.9 percent. The Dow finished the quarter up 0.4 percent.
During the second quarter the stock market was mostly characterized by wild swings as investors worried about inflation, slowing economic growth and the interest rate outlook.
This week was no exception. The blue-chip Dow fell sharply Tuesday but turned higher Wednesday and soared 217 points Thursday, its largest one-day point gain in three years, after the Fed raised its target for a key interest rate again but softened the language in its accompanying policy statement.
On Friday, investors moved to the sidelines as they digested the huge run-up and left for the holiday weekend.
Stock markets will close early Monday and stay closed through Tuesday for Independence Day.
Investors had a flood of economic data to consider Friday.
The Chicago Purchasing Managers Association's report showed business activity in the Midwest expanded in June.
The prices paid component of the survey surged to 89.0 from 76.9, raising inflation concerns.
A separate report on inflation showed core consumer prices - which strip out volatile food and energy prices and is said to be the Fed's favorite inflation gauge - rose 0.2 percent last month, in line with estimates.
That figure keeps the 12-month gain at the 2.1 percent level that was reached in April.
On deck for next week is the Institute for Supply Management's survey on manufacturing due Monday and Friday's employment report.
Investors have been worried for weeks that in an effort to ward off inflation, the Fed would raise rates too much and choke off economic growth and corporate profits.
The statement the Fed released Thursday, however, contained some softer language, which led to a sharp drop in the dollar and triggered a surge in stocks.
The words "some further" rate increases "may yet be needed" were missing from Thursday's statement, instead replaced with language saying future decisions will depend on the latest economic numbers.
Many took the statement as a sign that an end to the central bank's two-year old rate-hiking campaign may be in sight. (Full story)
But James Stack, president of InvesTech Research, said Thursday's stock rally was fueled more by relief that the Fed didn't come out with any major surprises.
"The same pressures still exist, which means rate hikes may not be over," he said.
In other economic news, personal income and spending also rose last month, but at a slower pace than in April.
The University of Michigan's Consumer Sentiment Index, a reading on June consumer confidence, came in at 84.9, above expectations and up from 79.1 the prior month.
Winners and losers were nearly evenly split on the 30-share Dow, with 16 components declining and 14 gaining.
General Motors (up $2.35 to $29.79, Charts) led advancers, rising nearly 9 percent after Kirk Kerkorian, one of the company's largest investors, urged the No. 1 automaker to consider a three-way partnership with Nissan Motor Corp. and Renault SA. (Full story.)
COMEX gold for August delivery soared $25.80 to $614.70 an ounce, lifting metal shares.
Market breadth was positive. On the New York Stock Exchange, advancers beat decliners by a margin of two to one on volume of 2.3 billion shares. On the Nasdaq, winners beat losers by a margin of three to two as 2.6 billion shares changed hands.
U.S. light crude oil for August delivery rose 40 cents to settle at $73.92 a barrel on the New York Mercantile Exchange.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 5.14 percent, down from 5.20 percent late Thursday. Bond prices and yields move in opposite directions.
In currency trading, the dollar sank against the euro and the yen.
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