Stocks largely ended down Friday, but significantly off earlier losses, as the tech-heavy Nasdaq turned slightly higher. The moves came amid light trading and continuing worries about the economic recovery and bearish action in expiring August options.
The Dow Jones Industrial Averageended down 57.6 points, or 0.9 percent, to 10,213.62. The Dow had lost more than 120 earlier Friday.
The blue-chip index was led lower by Hewlett-Packard , AT&T , and General Electric.
For the week, 3M had the most negative impact on the Dow, falling almost 4 percent. McDonald's had the most positive impact, rising 1.6 percent.
The S&P 500 ended down 3.9 points, or 0.4 percent, to 1,071.69. The Nasdaq rose a slight 0.8 points, or 0.04 percent, to 2,179.76.
The Nasdaq was pushed higher after earlier losses on the performance of tech companies, including Intuit , Marvelltechnology and Symantec .
For the week, Wells Fargo had the most negative impact on the S&P, falling nearly 5 percent, while Google hurt the Nasdaq the most, falling 5 percent.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 26.
Most of the key S&P 500 sectors fell, led by energy, industrials, and telecom, but utilities,technology, and consumer staples turned higher. For the week, 7 out 10 S&P sectors were negative, led by energy, down more than 2.25 percent. Tech was the most positive group, up 0.65 percent.
The Nasdaq is the one index to close higher for the week, but it is leading all three indexes lower for the year, down 4 percent. The S&P 500 is close on the Nasdaq's heels, losing 3.9 percent for the year, while the Dow is down 2 percent.
MarvellTechnology shares jumped almost 10 percent after the chipmaker gave a strong revenue growth forecast despite a tough hard-drive market, as it came out of an inventory overhang.
Intuit shares soared after reporting a quarterly loss narrower than expected, and was on pace to record a multi-year high. Symantec was benefiting from Thursday's news that Intel plans to acquire Symnatec rival McAfee.
Despite the boost in tech stocks, the market was still mostly down, and volume was light.
One concern is the spike in mergers and acquisitions activity to the highest levels seen since late 2009 —typically a bullish sign for the market — has failed to turn around sentiment, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
"If companies are willing to put cash to work and buy other companies, that’s usually a bullish sign," Detrick said. "But this economic data is trumping everything."
In addition, August monthly expiration occurs today, an event that now has taken a more bearish outlook, said Larry McMillan, president of McMillan Analysis in a note to clients.
"As a result, there is a negative bias to the expiration now, since there is some open interest in the in-the-money puts," he said. "This is likely why the market is lower today, even though there is no economic news."
McMillan added that a breakdown below 1,060 on the S&P 500 on a closing basis "would be a signal to turn fully bearish."
Despite decent earnings reports, Hewlett-Packard dropped after the tech giant said its profit fell in line with estimates. Investors remain concerned after CEO Mark Hurd's departure. At least three brokerages cut their price targets on HP, although they continue to have positive ratings on the stock.
Dell shares ended slightly higher but were also weak after the PC maker beat profit and revenue estimates, but said its gross profit margin lagged expectations. At least four brokerages cut their price targets on the firm.
Meanwhile, shares jumped for Salesforce.com to a multi-year high. Salesforce's second quarter numbers beat consensus estimates, and the company raised its outlook for future sales based on strength in cloud-based computing.
In other technology news, shares of Research In Motion tumbled after Morgan Stanley lowered its rating on the stock to "underweight" from "overweight," and cut its price target to $47 from $95, citing mounting security concerns from overseas governments with BlackBerry services in addition to demand for rival products, including the iPhone and Android phones.
The drumbeat of weak economic news weighed on crude oil prices, which have slumped to a six week low.Crude oilfell 2.6 percent this week to $73.46.
The weakness in oil is affecting energy stocks, led by drilling-company Nabors Industries and exploration firm Denbury Resources , which were both down significantly.
A number of retailers announced stock buybacks recently, as their stocks have fallen by 24 percent or more since the beginning of May. Shares of these retailers were mixed.
Ann Taylor announced plans to expand its existing share repurchase program to $400 million, and reporting strong earnings results.
Similarly, department-store chain Nordstrom said it would buy back up to $500 million of its common stock through January 2012 using cash on hand.
Gap authorized a buyback of $750 million shares, but the stock was lower after the retailer reportedweak same-store saleson Thursday afternoon.
In other earnings news, shares of Hormel Foods ended up slightly after the food-processing company posted earnings which beat expectations, with profits rising 11 percent on strong revenues. Hormel also raised its earnings forecast for the third time.
J.M. Smucker was higher after the maker of Jif peanut butter and Folgers coffee reported earnings results that exceeded expectations, helped by healthier margins and a lower tax rate.
In merger and acquisition news, BHP Billiton may see competition to its hostile takeover bid for Potash as reports suggest that the Canadian fertilizer company is in search of "white knight" bidders in China to trump the miner’s offer, currently worth $39 billion.
Tyco stock will return to the S&P 500 to replace Smith International , which is being acquired by rival oilfield services company Schlumberger. Bernstein cut Tyco's price target to $47 from $48, but has a rating of "outperform" on the stock.
Elsewhere, Fidelity Investments released a survey which showed that a record number of U.S. workers are tapping into their retirement accounts to make it through the economic downturn.
Economic data coming out next week is relatively light, although investors will get some news on the housing market from data releases on existing home sales and new home sales.
Also, the Commerce Department will release the second-quarter estimate for Gross Domestic Product and the prelminary estimate for second-quarter corporate profits.
New supply will hit the Treasury market, with the auction of two-year notes, five-year notes and 7-year notes.
Comex goldfor August delivery gained 1.01 percent this week to $1,227.20, ending higher for the third consecutive week.
On the New York Stock Exchange, 1.1 billion shares changed hands, with decliners leading advancers more than 4 to 3.
On Tap Next Week:
MONDAY: Chicago Fed National Activity Index; Earnings from Burger King
TUESDAY: Existing home sales, Richmond Fed survey, 2-year Treasury note auction.
WEDNESDAY: MBA mortgage applications, advance report on durable sales, new home sales, weekly oil inventories, 5-year Treasury note auction.
THURSDAY: Weekly jobless claims, 7-year Treasury note auction.
FRIDAY: GDP, corporate profits, consumer sentiment; Earnings from Tiffany
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