Stocks push mostly higher after sluggish week
NEW YORK — Investors are shedding some of their caution about the economy.
Stocks mostly rose Friday following gains overseas and a round of buying on Thursday as better-than-expected economic data suggested the U.S. economy might be on more solid footing than previously believed.
Trading volume was heavy because of the occurrence of a quarterly “quadruple witching,” which marks the simultaneous expiration of a number of different options contracts. Stocks are more likely to push higher during such periods, which can also bring jumpy trading.
The push higher follows gains in markets overseas and a round of buying on Thursday as better-than-expected economic data suggest the U.S. economy might be on more solid footing than some investors had feared.
Traders drew some optimism from European Union leaders who said at a financial summit in Brussels that the current round of economic stimulus measures are cushioning the worst effects of the downturn and that no new ones are needed.
Health care, technology and retail shares led the gains, while consumer staples and utilities lagged.
Traders are encouraged by recent economic data, including better news on unemployment and an improvement in the Leading Economic Indicators index Thursday, but with the Standard & Poor’s still down 2.2 percent for the week many investors are holding back before restarting a rally that powered the market up as much as 40 percent this spring after hitting a 12-year low in March.
“The mood is overall upbeat but skeptical,” said Janet Engels, director of private client research at RBC Wealth Management in New York.
At midday, the Dow Jones industrial average fell 15.11, or 0.2 percent, to 8,540.49, after earlier rising as much as 61 points. The broader Standard & Poor’s 500 index rose 0.91, or 0.1 percent, to 919.28 and the Nasdaq composite index rose 15.38, or 0.9 percent, to 1,823.10.
About two stocks rose for every one that fell on the New York Stock Exchange, where volume came to a heavy 972.7 million shares, compared with 437.8 million shares traded at the same time Thursday.
Stocks rose moderately Thursday after sliding earlier in the week. A private research group said its Leading Economic Indicators index, a forecast of economic activity, rose more than expected in May. And the overall number of people drawing unemployment benefits fell last week for the first time since early January.
Bond prices were higher after sliding Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.80 percent from 3.81 percent late Thursday.
Oil prices reversed early gains and fell 76 cents to $70.61 a barrel on the New York Mercantile Exchange.
The dollar fell against other major currencies, while gold prices rose.
Overseas, Japan’s Nikkei stock average rose 0.9 percent. In afternoon trading, Britain’s FTSE 100 rose 1.5 percent, Germany’s DAX index rose 0.04 percent, and France’s CAC-40 rose 0.9 percent.
Among health care stocks, medical device maker Medtronic Inc. rose 72 cents, or 2.2 percent, to $34.07, while drug maker Merck & Co. gained 65 cents, or 2.5 percent, to $26.30.
Shares of health care companies have been gaining in recent days as the Obama administration’s plans to overhaul the nation’s health care system make their way through Congress.
House Democrats planned to unveil a draft of their version of a sweeping health care bill Friday. It would require all individuals to obtain health insurance and force employers to offer health care to their workers, with exemptions for small businesses.
In corporate news, E-Trade Financial Corp. said a public offering of 435 million shares of common stock was priced at $1.10 apiece. The online brokerage and bank is trying to raise capital to shore up its balance sheet, which has been hit with losses on mortgage loans. The stock fell 18 cents, or 12.6 percent, to $1.25.
BlackBerry maker Research in Motion Ltd. reported a better-than-expected 33 percent increase in first-quarter earnings, but shipments were below expectations. The stock dropped $3.17, or 4.1 percent, to $73.38.
Auto retailer CarMax Inc. said its fiscal first-quarter profit dipped on a double-digit sales drop, but still beat Wall Street estimates. Shares climbed more than 13 percent, adding $1.73 to $14.82.
In other trading, the Russell 2000 index of smaller companies rose 4.39, or 0.9 percent, to 513.87.
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