Blue Chips Gain, Techs Slip

Indexes finished mixed Friday as Wall Street, encouraged by a series of economic reports but wary about growing world tensions going into a weekend, backed away from a solid rally. 

The Dow Jones industrial average was up 13.56 points, or 0.14 percent, at 9,925.25, according to the latest figures. The technology-laced Nasdaq Composite Index was down 16.19 points, or 0.99 percent, at 1,615.73. The broader Standard & Poor's 500 Index was up 2.48 points, or 0.23 percent, at 1,067.14 after four straight losing sessions.

"The economic numbers are all pointing in the right direction for a big rally, but instead we have a moderate one based on world worries," said Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees about $600 million. "You need more confidence to buy tech stocks because of the lack of earnings visibility."

For the week, the Dow average slipped 1.8 percent, the S&P 500 lost 1.5 percent and the Nasdaq dropped 2.7 percent.

During May, the Dow slipped 0.2 percent, the S&P 500 dropped 0.9 percent and the Nasdaq was down 4.3 percent.

The broader market almost erased earlier strong gains in the final few hours of trading, reflecting the market's unease about potential military blow-ups in the world's hot spots - notably conflict between nuclear rivals India and Pakistan.

Adding to fears, the U.S. government said it authorized the departure of non-emergency staff from India.

"Things started to weaken around lunch time," said Dan McMahon, head of listed trading at CIBC World Markets Inc, "Especially with India and Pakistan, nobody wants to go home long and wrong over the weekend."

"The mood is still tentative and guarded," said Hugh Johnson, chief investment officer at First Albany Corp.

Economic data provided an early boost to stocks. U.S. consumer sentiment climbed in May to 96.9 from 93 in April, its highest level in 1-1/2 years, according to the University of Michigan's consumer index.

Shares of department stores jumped on hopes consumer spending will drive the economic rebound and the S&P department stores index was the best performing group in the S&P 500, gaining 3.1 percent. Federated Department Stores rose $1.11 to $41.41.

"The major issue still is corporate earnings and how healthy they will be," said Robert Cohen, head trader at Credit Suisse First Boston. "If the consumer's getting a little more exuberant and willing to open their pocketbooks, it could manifest in better earnings."

Orders for U.S. manufactured items surged in April, posting their biggest gain since October 2001, a separate report showed. And another piece of data pointed to a jump in U.S. manufacturing in the Midwest in May.

Palm Inc. (PALM) tumbled 62 cents, or more than 28 percent, to $1.59 and was the second-most active stock traded on Nasdaq. The handheld computer maker said quarterly sales would fall far short of targets and the company pushed back its timetable for reaching operating profits after an expected burst of sales failed to appear.

Still, news of some acquisitions helped Wall Street become more optimistic about the corporate outlook.

U.S. drug company Bristol-Myers Squibb Co. (BMY) rose $1.27 to $31.12 and Europe's top drugmaker GlaxoSmithKline Plc (GSK) dropped $1.31 to $40.75 in U.S. trading. The drug heavyweights have held preliminary discussions about the possibility of a merger, The New York Times reported, citing executives close to the talks. Spokesmen from the companies declined comment.

"There's been a paucity of deals, which indicate a lack of confidence by corporate managements, but this may be a sign that people are feeling more confident," said Cohen.

Restaurant chain Dave & Buster's Inc. (DAB) rallied $1.54, or more than 14 percent, to $12.13 after saying it agreed to be bought by a management-led investment group for $155 million that would continue the brand's expansion in the United States and overseas.

Adelphia Communications Corp. (ADLAE), the No. 6 U.S. cable TV operator, slumped 46 cents, or almost 40 percent, to 70 cents. The Nasdaq Stock Market said it would delist Adelphia's stock, a move that could push the embattled cable television company closer to bankruptcy.

Computer software maker Firepond Inc. (FIRE) said its acting vice president of sales falsified documents and forged signatures related to three contracts worth $5 million. The news sent shares tumbling 16 cents, or 24 percent, to 50 cents.

Firepond, which makes software for customer service and sales, was once a high-flying technology player whose stock briefly traded above $100 a share. The stock collapsed two years ago amid the technology bust and has not closed above $3 since February of last year.

Support, where buyers usually swoop in, is at 1,600 for the Nasdaq, 9,735 for the Dow, and 1,050 for the S&P 500, according to Schaeffer's Investment Research. Resistance, where sellers usually emerge en masse, is at 10,025 for Dow and 1,080 for the S&P. The Nasdaq briefly broke through its resistance level at 1,650.

Advancing issues outnumbered decliners 5 to 3 on the New York Stock Exchange. Volume was light at 1.23 billion shares, up marginally from 1.22 billion Thursday.

The Russell 2000 index, the barometer of smaller company stocks, slipped 0.36, or nearly 0.1 percent, to 487.47. For the week, the Russell fell 6.17, or 1.3 percent.

Overseas, Japan's Nikkei stock average finished Friday off 0.1 percent. In Europe, France's CAC-40 advanced 0.3 percent, Britain's FTSE 100 gained 0.9 percent, and Germany's DAX index gained 1.2 percent.

Reuters and the Associated Press contributed to this report.