Buyers Pounce, but Spree Fails To Lift Markets for the Week
In this Friday, March 15, 2013, photo, Trader Richard Scardino, right, uses his handheld device as he works on the floor of the New York Stock Exchange. World markets were lower Friday March 22, 2013 because of uncertainty over the restructuring of troubled banks in Cyprus. (AP Photo/Richard Drew)
Strong company earnings boosted stocks on Wall Street Friday. Investors also saw a chance to add to their holdings after declines earlier in the week.
Nike reported a surge in quarterly profit, sending its stock price to a record. Tiffany topped earnings predictions, boosted by demand from customers in Asia.
Investors were also drawn by a pause in the market’s big run-up. The Standard & Poor’s 500 index logged its second weekly decline of the year, despite Friday’s gains.
The damper on U.S. stock markets was caused by another worrisome chapter in Europe’s debt crisis, and some disappointing corporate news.
The Mediterranean island nation of Cyprus, a banking haven, is struggling to devise a plan to avoid financial collapse. Stocks were also weighed down on Thursday by weak sales from Oracle. That news brought down technology stocks.
FedEx ended the week 10 percent lower after it reported a drop in quarterly profit and cut its annual earnings forecast on Wednesday. The company is a gauge of the economy because so many shoppers and businesses use its shipping services.
On Friday, investors took advantage of the market’s down week and ramped up their stock buying.
A resilient global economy has encouraged investors to pick up stocks on any dips, said Ron Florance, managing director of investment strategy at Wells Fargo Private Bank.
“We still have an astonishing amount of money sitting on the sidelines,” said Florance.
The Dow Jones industrial average rose 90.54 points, or 0.6 percent, to 14,512.03 Friday. The S&P’s 500 index rose 11.09 points, or 0.7 percent, to 1,556.89. The Nasdaq composite gained 22.40 points, or 0.7 percent, to 3,245.
Nike shares hit an all-time high, rising $5.93, or 11 percent, to $59.53 after the company reported a 55 percent spike in quarterly net income. Tiffany rose $1.32, or 1.9 percent, to $69.23 after its strong fourth-quarter earnings.
For the week, though, the S&P 500 was seven points, or 0.3 percent, lower than it was at the start of trading on Monday.
The index last logged a weekly decline Feb. 22, falling 0.3 percent, after investors were spooked by the minutes from the Federal Reserve’s January policy meeting. The minutes revealed disagreement over how long to keep buying bonds in an effort to boost the economy.
The Dow shed a fraction of a percentage point last week.
A pause in the stock market run-up is now due because gains this year overstate the improvement in the economy, said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
The biggest risk to the market run-up this year will come when the Fed faces increasing pressure to end its stimulus program. That could happened if the economy continues to improve and stock markets rise, said Sandven.
The yield on the 10-year Treasury note rose to 1.93 percent from 1.92 percent.
Among other stocks making big moves Friday:
∎ Micron Technology rose 97 cents, or 10.7 percent, to $10.05 despite reporting a loss in its fiscal second-quarter later Thursday. The chipmaker said that revenue grew 3 percent, to $2.08 billion, better than analysts had expected.
∎ Anacor Pharmaceuticals Inc. climbed $1.24, or 25.6 percent, to $6.08 Friday, after the drug developer reported strong data from a mid-stage study of a potential chronic rash treatment.