Tough week on Wall StreetA rough week for investors ends with mixed results as the Dow continues to fall on credit market woes and the Nasdaq manages slim gains thanks to Amazon.com.Video
NEW YORK (CNNMoney.com) -- Stocks ended a rough week on Wall Street in mixed territory Friday, as ongoing credit market woes dragged down the financial sector and Amazon.com's stock buyback plan gave the tech stocks a boost. According to early tallies, the Dow Jones industrial average (INDU) lost about 0.5%, while the broader Standard & Poor's 500 (SPX) index fell 0.4%. The Nasdaq composite (COMP) gained 0.5% after falling into bear market territory earlier this week, defined as a drop of 20% from the recent highs. All three stock gauges ended the week with losses, after managing a big rally in the previous week. Stocks managed to end a choppy session higher Thursday, breaking a three-day losing streak. But investors struggled in a choppy session Friday. "We were looking OK this morning, with Amazon and some of the earnings, but then this malaise just set in," said Donald Selkin, director of research at Joseph Stevens. "You've got the financials falling apart today and whenever that happens, you know it means there are more credit crisis worries." With the exception of Thursday, stocks have fallen every day this week, reflecting the overall negativity that is the current trend on Wall Street, Selkin said. Tech strength is countered by bank weakness. Amazon.com (AMZN, Fortune 500) on Friday said its board approved a plan to buy back $1 billion of the company's stock over the next two years. The company also said it was setting up a program to buy back debt. Shares jumped 3%. But the financial sector continued to exert a drag amid continued uncertainty about the impact of the credit market crisis. Citigroup (C, Fortune 500), JP Morgan (JPM, Fortune 500), Lehman Brothers (LEH, Fortune 500), Merrill Lynch (MER, Fortune 500) and Morgan Stanley (MS, Fortune 500) all retreated. Recession fears weighed on stocks in January, with the Nasdaq seeing its worst start to the year ever. Late Thursday, both chambers of Congress approved a roughly $170 billion plan meant to boost the economy, through tax rebates to individuals, tax breaks for businesses and help for homeowners. President Bush is expected to sign the measure next week and rebate checks could be mailed out starting in May. (Full story). Friday's one economic report was the December reading on wholesale inventories, which showed a rise of 1.1%, topping forecasts for a rise of 0.3%. On the move. In addition to Amazon, Microsoft (MSFT, Fortune 500) and Apple (AAPL, Fortune 500) were among the big technology movers giving the Nasdaq some support. Cognizant Technology Solutions (CTSH) reported higher fourth-quarter profit that beat expectations and issued an upbeat forecast. Shares jumped 17% in active Nasdaq trade. On the upside, Tiffany (TIF) boosted its fiscal 2008 earnings forecast, citing strong international sales. Shares jumped. Alcatel-Lucent (ALU) reported a big quarterly loss, said it would scrap its 2007 dividend and also forecast a tough 2008, sending shares lower. Allergan (AGN) shares slumped 5% after the FDA warned that the company's Botox had produced some severe side effects. (Full story) In other news, troubled bond insurer MBIA (MBI) boosted the size of a public stock offering to $1 billion, as part of its efforts to raise money so it can maintain its financial strength rating. Worries about a fallout in the bond insurance market have added to the economic uncertainty of late. However regulators say it probably only poses a moderate risk. Market breadth was negative. On the New York Stock Exchange, losers topped winners by over 3 to 2 on volume of 1.12 billion shares. On the Nasdaq, decliners edged advancers 3 to 2 on volume of 1.87 billion shares. Fed heads talk. Investors also considered comments from a number of Federal Reserve officials. Cleveland Fed Bank President Sandra Pianalto, speaking Friday, said that a comprehensive approach is needed to address the mortgage problems, according to news reports. Pianalto, who is a voting member of the Fed's 2008 policy committee, did not speak on monetary policy. San Francisco Fed Bank President Janet Yellen said late Thursday that while the economic slowdown will likely last all year, the United States may be able to avoid a recession. Yellen is an alternate member of the Fed's 2008 policy-setting committee Other markets. Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.64% from 3.77% late Thursday. Bond prices and yields move in opposite directions. In currency trading, the dollar fell versus the yen and the euro. U.S. light crude oil for March delivery rose $3.66 to settle at $91.77 a barrel on the New York Mercantile Exchange. COMEX gold for April delivery added $12.30 to settle at $922.30 an ounce. |
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