Dow Logs 2nd Straight Down Week; Techs Gain

The Dow capped another down week with a loss Friday as investors shrugged off a surge in consumer sentiment and instead focused on the fact that consumers are squirreling away their money at a feverish pace. But techs gained after encouraging earnings from Palm.

The Dow Jones Industrial Average lost 34.01, or 0.4 percent, to close at 8,438.39. The S&P 500 fell 0.2 percent, while the tech-heavy Nasdaq gained 0.5 percent.

The Dow logged its second straight down week, shedding another 1.2 percent. The S&P's loss was much smaller, just 0.3 percent, while the Nasdaq gained 0.6 percent.

Five of ten key S&P sectors were higher this week, led by telecoms, which gained 3.7 percent. Energy was the most negative, sliding 2.7 percent for the week. Financials shed 1.3 percent.

All 30 Dow components are higher since the March 9th lows.

Year-to-date, the top Dow performers are American Express and four — count 'em, four — tech stocks: IBM , Microsoft , Cisco and Intel .

The Dow's bottom five year-to-date are: GE , Caterpillar , P&G , Pfizer and ExxonMobil .

Today's economic reports showed consumer income and spending rose, and consumer sentiment soared,butthe troubling thing for investors was that the savings rate surge to its highest in 15 years.

The week was marked by some encouraging economic data and solid demand for a record $104 billion of Treasury auctions, which sent stocks to their best performance in three weeksThursday. But some analysts said Wall Street is tracking for some profit-taking this summer.

The S&P 500 has gained about 40 percent since touching down at a 12-year low in early March, but the rally has stalled recently as investors look for the catalysts for economic growth.

JPMorgan Securities said in a research note that the Standard & Poor's 500 was facing a correction that would likely send the index down to 830 to 875, which would represent a 5 to 10 percent drop from its current level.

But, as other analysts have predicted, JPMorgan sees a rally by year end which would take the S&P up to 950 to 1,000.

Among the other notable moments of the week were the Fed's statement Wednesday, in which it said it expects to keep interest rates exceptionally low for an extended period and congressional testimony from Fed chairman Ben Bernanke on his role in the Bank of America-Merrill Lynch merger. Bernanke told lawmakers that he didn't bully BofA CEO Ken Lewis.

In Friday's trading, Bank of America rose 3.2 percent following reports that the bank has escalated succession plans for CEO Ken Lewis.

Techs advanced after smart-phone maker Palm posted a narrower-than-expected lossamid strong demand for the Palm Pre, which just debuted in June. The gadget's popularity is expected to be more fully reflected in the current quarter's results.

Palm shares jumped 16 percent to close at $16.22, their highest in nearly two years.

But shares of Micron Technology slipped 3.8 percent after the chip maker posted its 10th consecutive loss.

KB Home shed 9.1 percent after the homebuilder reported a wider-than-expected loss, and S&P Equity downgraded its rating on the stock to "sell" from "hold."

>> Five Reasons Housing Isn't Recovering

General Electric shares declined 0.9 percent after CEO Jeff Immelt said the company's financial-services unit is currently undervalued and is worth up to $20 billion.

Boeing fell 1.5 percent after another setback with its Dreamliner model after Australian airline Qantas scrapped and deferred orders for 30 new planes.

General Motors ended flat amid concern that the automaker may face further difficulty selling its Hummer unit after a report said China's planning agency is likely to block the acquisition of HummerbySichuan Tengzhong Heavy Industrial Machinery.

Exxon and Chevron both finished down more than 1 percent as oil settled at $69.16 a barrel, roughly flat for the week.

Still, crude is up 50 percent from its March 9 low.

UBS shares skidded 5.2 percent after the bank said it was planning to raise $3.5 billion in capital, a move that analysts said would be positive even as they speculated about how long it would take for the bank to stabilize.

Volume was heavy, with 2.35 billion shares changing hands on the New York Stock Exchange — well above last year's daily average of about 1.5 billion and recent daily volume which has been around 1.1 to 1.2 billion. Advancers outpaced decliners, roughly 3 to 2.

On Tap for Next Week:

MONDAY: Manufacturing reports from Dallas, Chicago Fed branches; Earnings from H&R Block
TUESDAY: Case-Shiller home-price index; leading indicators; Conf. Board consumer confidence; Fed's Bullard, Hoenig and Yellen speak
WEDNESDAY: Weekly mortgage applications; ISM manufacturing index; construction spending; pending-home sales; weekly crude inventories; Fed's Evans speaks
THURSDAY: Weekly jobless claims; May jobs report; factory orders
FRIDAY: All U.S. financial markets closed for the Independence Day holiday

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