Techs Lead Rally but Dow Sheds 1% for Week
Stocks rallied to the finish line Friday as tech stocks surged after some encouraging comments from Intel's CEO.
Investors breathed a sigh of a relief after the August jobs report, which showed the unemployment rate hit a 26-year highbut layoffs seemed to be tapering off, and there was some short covering ahead of the long weekend.
The Dow Jones Industrial Average rose 96.66, or 1 percent, to close at 9,441.27. The S&P 500 jumped 1.3 percent and the Nasdaq soared 1.8 percent as tech stocks rallied.
But it wasn't enough to claw back all of the week's losses: The Dow ended the week down 1 percent, the S&P lost 1.2 percent and the Nasdaq dropped 0.5 percent, snapping a two-week winning streak.
U.S. financial markets will be closed Monday for the Labor Day holiday.
It was all about financials this week, with heavy trading in Bank of America , Citigroup , Fannie Mae and Freddie Mac and AIG but today's big story was tech.
Tech stocks advanced after Intel's CEO said aging personal computers and Windows 7 will prompt companies to start spending on PCs again next year. The remarks underscored the wider belief that corporate IT spending will pick up next year.
Novellus gained nearly 3 percent after the chip-equipment maker raised its forecast.
And shares of memory-chip developer Rambus shot up 11 percent to $17.75 a share amid rumors that rival Samsung Electronics may offer to buy the company for between $25 and $27.50 a share.
What were the big market-moving stories this week? Click on the video at left to watch "The Week and You" with Courtney Reagan.
The tech-heavy Nasdaq outperformed both the Dow and S&P today, and Microsoft and Cisco were among the best performers on the Dow.
Leap Wireless continued to rally, making it one of the biggest percentage gainers on the Nasdaq 100, amid rumors this week that AT&T might be looking to buy the wireless provider.
Gold pulled back a bit. settling at $994.50, after its best two-day rally since March, which pushed the December contract as high as $999.50 Thursday. Gold hasn't closed above $1,000 since February 20.
Oil dropped 6.5 percent this week, settling at $68.02 a barrel, though Dow energy components ExxonMobil and Chevron ticked higher.
Abercrombie & Fitch shares skidded after Citigroup downgraded the stock to "sell" from "hold," saying the teen chain will continue to see same-store sales deteriorate as it hasn't managed the recession well.
Volume was weak, as it has been all week, with only about 1 billion shares changing hands on the New York Stock Exchange. Advancers outpaced decliners, 4 to 1.
It was an eventful week on Wall Street, which began with an end — the end of August. Stocks gained 3.5 percentfor the month, racking up their fifth straight up month, but ended on a sour note Monday as worries about China spurred worries about the recovery here.
September, typically a bad month for stocks, kicked off with a thud on Tuesday amid rumors — that later proved unfounded — that another bank failure was coming.
Among the big stories this week: Disney agreed to buy comic-book titan Marvel for $4 billion. Automakers posted their first sales gains in two years, boosted by the Cash for Clunkers Program. Retailers posted mostly disappointing sales for August but a few managed to surprise, including Costco, Target and Gap.
Things started to ease up by Thursday and posted their first gain for the week, which carried through into today's session.
Next week will start off slow with the Labor Day holiday, but will pick up as the week goes on with a few key data points, including the Fed's beige-book report and consumer sentiment.
On Tap for Next Week:
MONDAY: All US markets closed for Labor Day
TUESDAY: 3-year auction; consumer credit
WEDNESDAY: Weekly mortgage applications; Fed's Evans speaks; 10-year auction; beige book
THURSDAY: International trade; weekly jobless claims; weekly crude inventories; 30-year auction; Nat Semi earnings
FRIDAY: import/export prices; consumer sentiment; wholesale trade; Treasury budget; Campbell Soup earnings
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