Dow Finishes Big Week With Small Gain
The Dow scraped out a gain in the last 15 minutes of trading Friday, bringing a rousing week-long earnings-spurred rally to a positive close.
The bluechip index closed just one-third of a percent higher, but it was enough to cement a 7.3 percent rally that came as earnings season kicked into full gear. All 30 Dow components were positive for the week.
The Standard & Poor's 500 and the tech-laden Nasdaq finished almost flat for the day, but both also capped off strong weeks.
For the week, the S&P was up a shade under 7 percent, while the Nasdaq gained 7.4 percent, putting the index up 8 percent over the past eight sessions.
Wall Street struggled for direction most of the day, trading right around breakeven as worries over General Electric put a damper on earnings momentum.
GE shares hit a sharp slide even though the company's earnings actually beat Wall Street estimates. Credit-quality issues that have dogged financial firms, though, put a damper on the report
It was an enormous week for financial stocks, particularly credit card companies including Capital One Financial and American Express, both of which said they expected delinquencies to ease.
Financials again were in focus Friday.
CIT Group was among the big stories of the day as the major commercial lender weighed options to avoid bankruptcy, including talks with JPMorgan Chase and Goldman Sachs for a $2 billion to $3 billion short-term cash infusion. CIT shares were approaching 100 percent gains for the day.
The market weighed conflicting economic reports, one showing an unexpected rise in new housing starts and building permitswhile another that showed unemployment reaching record highs in several states.
And International Business Machines rose after beating earnings estimates and raising its outlook Thursday. IBM led gainers on the Dow Jones Industrial Average.
But General Electric reported a second-quarter profit of 26 cents a share, topping consensus estimates of 23 cents a share. Revenue of $39 billion was slightly below the $42 billion analysts predicted. (GE is the parent company of CNBC.)
At the same time, Bank of America beat expectations with earnings of 33 cents per share against estimates of 29 cents, but traders looked at warnings of tough sledding for the rest of of the year.
BofA and GE were the two worst Dow performers.
Citigroup helped stem the negative tide early on, reporting a $4.3 billion profit helped significantly from a joint deal with Morgan Stanley regarding Citi's Smith Barney Unit. But as trading progressed investors soured on the stock, worried that the earnings couldn't be sustained.
Wall Street is trying to make it a perfect week for the bulls — with the Dow, the S&P 500 and the Nasdaq rising in all four trading days so far this week.
The Nasdaq is riding a 7-session winning streak, gaining about 8% over that time. The Nasdaq last had a 7-session winning streak in September of 2006.
Google shares fell after its sales outlook disappointed investors.
On a positive note, toymaker Mattel gained after the company said that while sales of Barbie and other products fell in the second quarter, profit rose 82 percent.
The correlation between oil and stocks broke apart, as US light sweet crude posted a 2 percent gain to near $64 a barrel, but equities did not follow suit.
Market breadth was slightly negative, with losers slightly higher than gainers for the day. Volume was light, with less than 1 billion shares changing hands on the New York Stock Exchange with less than a half-hour to go before the closing bell.