“We’ve had a week of mediocre news for the United States; not a soft patch, not concerning, but certainly not inspiring,” said Jim Russell, senior equity strategist for U.S. Bank Wealth Management in Cincinnati.
DJIA 15,115.57, -208.96, -1.36%
Dow average on Friday
Dow average on Friday
“We would like to see a quiet summer, where the market marks some time and consolidates some recent gains,” added Russell of Wall Street’s advance, which put the Dow Jones Industrial Average (DJI:DJIA) ahead 1.9%, the S&P 500 index (SNC:SPX) up 2.1%, and the Nasdaq Composite (NASDAQ:COMP) up 3.8% for the month.
After rising 67.8 points, the Dow Jones Industrial Average (DJI:DJIA) ended down 208.96 points, or 1.4%, at 15,115.57, its steepest drop since mid-April. The selloff accelerated late in the session:about 30 points of the Dow’s 209-point slide came in the last minute, FactSet data show.
Intel Corp. (NASDAQ:INTC) led gains that included just two of the blue-chip index’s 30 components. Intel’s gains came a day after Reuters reported Samsung Electronics had picked an Intel processor to power a new version of one of its tablets.
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The S&P 500 index (SNC:SPX) declined 23.67 points, or 1.4%, to 1,630.74, with health care and energy hardest hit among its 10 industry groups.
Financials have performed the best in May, followed by industrials and technology, with investors rotating in and out of sectors in search of bargains.
“With interest rates being revalued, stocks are being revalued too. We haven’t seen the ‘great rotation’ (out of bonds and into stocks), but we are seeing rotation within the stock market itself,” said J.J. Kinahan, chief strategist at TD Ameritrade.
The S&P 500 marked seventh monthly advance, its longest monthly winning streak since one ending in September 2009. The Dow industrials recorded their sixth straight monthly gain.
“I think bulls would consider it a victory to come out of today with even a small loss. There has been so much pressure from Asia all week, and yet the S&P has hung in there,” said Kinahan.
The U.S. dollar (NYE:DXY) on Friday fell to a three-week low against the Japanese yen (ICAP:USDJPY) , with the American currency notching an eighth straight month of gains versus the yen. Expectations of monetary easing moves by the Bank of Japan is expected to result in further softening of Japan’s currency.
The Nasdaq Composite (NASDAQ:COMP) lost 35.38 points, or 1%, to 3,455.91.
For every stock rising, more than five fell on the New York Stock Exchange, where more than 1.1 billion shares traded.
Composite volume topped 3.9 billion.
Equities had shed their losses and turned higher after the release of the Thomson Reuters/University of Michigan’s final index of consumer sentiment, which climbed to 84.5 for May, topping forecasts and hitting its highest level since 2007.
“The consumer sentiment is very encouraging for the market overall; we had a quick bounce when that number came out,” said Kinahan at TD Ameritrade.
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Next 24: Bernanke, ISM, Ford
Federal Reserve chairman Ben Bernanke and Fed vice chairman Janet Yellen speak this weekend. The market prepares for manufacturing data from China and the U.S. Laura Mandaro has a look at market-moving events to watch before Monday’s open and in the week ahead. Photo: Getty Images.
Casting the largest chunk of the U.S. economy on uncertain footing, the Commerce Department on Friday reported household purchases declined 0.2% last month, following a 0.1% rise in March; incomes were static.
Equity futures held their drop after the spending report.
Separately, the Chicago PMI jjumped to 58.7 in May, its best reading in more than a year.
“The numbers paint the same picture we’ve seen for a while. The economy is growing, albeit we’d love 5% GDP, but the 2.5% GDP is a fine level; most CEOs say they can continue to make money,” said Kinahan.
Dell Inc. (NASDAQ:DELL) rose 0.6% as founder Michael Dell, the computer maker’s board of directors and its private-equity partners faced a lawsuit by shareholders contesting Dell’s effort to take the company private.
Dell on Friday urged shareholders to vote for the $24.4 billion buyout offer led by CEO Dell at a special meeting July 18, calling it better than other options.
Among movers, Krispy Kreme Doughnuts Inc. (NYSE:KKD) climbed after the doughnut maker beat first-quarter profit and revenue estimates and raised its outlook for the year.
U.S. stocks gained on Thursday as reports on economic growth and jobless claims heightened thinking that the Federal Reserve would continue its level of monthly bond purchases.
The central bank’s monetary easing is a major factor in the bull market, now in its fourth year.