Stocks were bouncing in and out of positive territory Friday after a burst at the open disappeared following news a measure of consumer sentiment unexpectedly hit the lowest level in more than a year.
The Dow Jones Industrial Average fell slightly after opening more than 30 points higher. DuPont, Walt Disney and United Technologies rose. JP Morgan and Hewlett-Packard fell.
The S&P 500 was also down slightly after briefly touching an intraday high Friday morning of 1,137.47. The S&P 500 has been bound in a range capped at 1,130, and some analysts believe the market could move higher once it breaks through that crucial barrier.
The Nasdaqadvanced. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 22.
Industrials, consumer discretionary, and technology sectors were higher, while financials and energy stocks fell.
Among technology stocks, shares of Oracle and Research in Motion remained higher following better-than-expected earnings results reported on Thursday after the market close. Texas Instruments also rose after the semiconductor firm announced a plan to buy back another $7.5 billion of common stock, and said it would raise its quarterly dividend to 13 cents a share.
An overall boost in the tech sector didn't include all stocks. Microsoft fell after FBR Capital Markets lowered its profit estimates for the company, because of softer demand for PCs, and Intel also slipped.
Restaurant stocks were hit after Jefferies began coverage of the sector with a cautious view of near-term fundamentals. McDonald's and Yum Brands were both started with "hold" ratings. Brinker , meanwhile, was cut to "neutral" from "buy" by Bank of America.
Elsewhere, Johnson & Johnson is in talks to buy the shares it doesn't yet own of Dutch biotech firm Crucell. The U.S. health care company is expected to pay $2.3 billion in a bid to strengthen its vaccine business. Shares edged higher premarket.
And BP reached a milestone in the process of capping its Gulf of Mexico ruptured oil well for good, as a relief well made contact with it. BP shares in London were higher. In New York, BP shares closed up.
The Thomson Reuters/University of Michigan's reading of consumer sentiment in September fell to a surprisingly low level of 66.6, down from 68.9 in August. Economists surveyed by Briefing.com expected a slight improvement to a reading of 70 for September.
The CPI for August rose 0.3 percent, the same increase as July, according to the Bureau of Labor Statistics. The index was expected to show a rise of 0.2 percent, according to Briefing.com research. The Core CPI, which excludes food and energy costs, rose 0.1, in line with expectations.
Market direction could be affected Friday by quadruple witching — when stock index futures, stock index options, stock options and single stock futures expire at the same time. Traders often cite quadruple witching as a source of volatility.
Volume in the options market, however, has been light, and volatility is at its lowest level in four months. That means investors aren't fearful of the market's direction, said Nate Peterson, senior derivatives analyst at Charles Schwab.
But given the low levels of the VIX, the uncertain economic outlook, and in advance of earnings pre-announcement season, active investors should consider purchasing protection for their investments, Peterson said.
"Additionally, options traders may be inclined to buy, rather than sell, volatility around these levels as they could benefit from an increase in implied volatility in the event of a market sell-off, in addition to the underlying price action," he said in a research note.While stocks have continued to move higher this month, investors are still pouring money into safe-haven assets like gold. The precious metal hit a second record high of the week on Thursday, settling at $1,273.80 an ounce, although prices are easing in early morning trading.
European shares were higher with mining companies seeing most of the gains. Asian stocks ended up with the Nikkei 225 getting a further boost from yen weakness in the wake of government intervention to weaken the currency Wednesday.
Meanwhile, Federal Reserve Governor Daniel Tarullo will speak on regulating shadow banking at 11:30 a.m. in Washington.
And President Barack Obama is expected to name Elizabeth Warren as a special adviser overseeing the creation of a consumer protection agency.
On the Calendar:
FRIDAY: Quadruple witching
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