While upbeat earnings news helped to drive stocks higher in early trading on Friday, buying interest waned over the course of the trading day. Traders subsequently sold into the rally, resulting in a mixed close for the markets.
The major averages ended the day on opposite sides of the unchanged line, with the Nasdaq posting a modest loss. The Nasdaq slipped 7.11 points or 0.2 percent to 3,000.45, while the Dow rose 65.16 points or 0.5 percent to 13,029.26 and the S&P 500 edged up 1.61 points or 0.1 percent to 1,378.53.
For the week, the major averages also turned in a mixed performance. While the Nasdaq fell by 0.4 percent, the Dow advanced by 1.4 percent and the S&P 500 rose by 0.6 percent.
The early strength on Wall Street was largely due to a positive reaction to quarterly results from big-name companies such as Microsoft (MSFT), General Electric (GE), and McDonald's (MCD).
After the close of trading on Thursday, Microsoft reported fiscal third quarter earnings of $0.60 per share, better than the consensus estimate of $0.58 per share. Revenues rose 6 percent to $17.4 billion, exceeding the $17.2 billion consensus estimate.
While GE reported first quarter net earnings that fell year-over-year, the diversified conglomerate reported adjusted earnings of $0.34 per share, a penny above analyst estimates. Revenues fell 8 percent year-over-year to $35.2 billion but also came in above expectations.
Fast food giant McDonald's reported first quarter earnings that rose to $1.23 per share from $1.15 per share in the year-ago quarter, in line with estimates. The company also reported sales growth that matched the expectations of economists.
Honeywell (HON), Advanced Micro Devices (AMD), and Capital One Financial (COF) were among the other well-known companies that reported better than expected quarterly results.
Nonetheless, trading activity was relatively subdued amid a lack of major U.S. economic data and lingering uncertainty about the financial situation in Europe.
A notable drop by shares of Apple (AAPL) contributed to the pullback by the tech-heavy Nasdaq, with the tech giant closing down by 2.5 percent.
Despite the pullback by the broader markets, significant strength remained visible among biotechnology stocks. The NYSE Arca Biotechnology Index advanced by 1.7 percent on the day, reaching a nearly nine-month closing high.
Sequenom (SQNM) and Myriad Genetics (MYGN) turned in in two of the biotech sector's best performances, closing up by 7.1 percent and 5.9 percent, respectively.
Housing stocks also saw continued strength on the day, resulting in a 1.6 percent gain by the Philadelphia Housing Sector Index. D.R. Horton (DHI) helped to lead the sector higher, jumping by 5.2 percent.
Commercial real estate and pharmaceutical stocks also posted notable gains, while considerable weakness was visible among electronic storage and semiconductor stocks.
SanDisk (SNDK) and Altera (ALTR) fell by 11.3 percent and 8.4 percent, respectively after reporting disappointing first quarter results.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Friday. While Japan's Nikkei 225 Index ended the day down by 0.3 percent, Hong Kong's Hang Seng Index edged up by 0.1 percent.
Meanwhile, the major European markets all moved to the upside on the day. The German DAX jumped by 1.2 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index both advanced by 0.5 percent.
In the bond market, treasuries gave back some ground after moving higher in the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 1.8 basis points to 1.97 percent.
Next week, traders are likely to keep a close eye on the Federal Reserve's latest monetary policy decision on Wednesday. While the Fed is widely expected to leave interest rates at near-zero levels, the markets will pay close attention to any comments regarding the outlook for further quantitative easing.
The preliminary report on first quarter GDP may also attract attention along with reports on new home sales, durable goods orders, and weekly jobless claims.
On the earnings front, Apple, Exxon Mobil (XOM), 3M (MMM), United Technologies (UTX), Boeing (BA), Caterpillar (CAT) and AT&T (T) are among the slew of companies scheduled to release their quarterly results next week.
by RTT Staff Writer
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