NEW YORK – Stocks ticked higher in light trading Friday, with the Dow and the S&P advancing for a fifth straight week, as investors picked up bargains and retailer Sharper Image reported a robust holiday shopping season.
The Dow Jones industrial average (search) ended up 19.48 points, or 0.19 percent, at 10,324.67, based on the latest available numbers. The blue-chip gauge snapped a six-day string of gains on Wednesday when Dow component McDonald's sank more than 5 percent on mad cow fears. The broader Standard & Poor's 500 (search) edged up 1.85 points, or 0.17 percent, to 1,095.89. The technology-heavy Nasdaq Composite (search) gained 3.91 points, or 0.20 percent, to 1,973.14.
For the week, the Dow finished up 0.45 percent, the S&P rose 0.66 percent and the Nasdaq advanced 1.1 percent. For the year so far, the Dow has climbed 23.8 percent, the S&P 500 has shot up 24.6 percent and the Nasdaq has surged 47.7 percent.
Trading floors were quiet with many Wall Streeters taking the day off. Almost 358 million shares changed hands on the New York Stock Exchange and about 529 million on Nasdaq. The stock market shut early at 1 p.m. on Friday after having been closed for Christmas Day Thursday.
McDonald's Corp. (MCD), the No. 1 hamburger chain and one of the 30 Dow components, inched higher following a drop of more than 5 percent on Wednesday after the first case of mad cow disease was discovered in the United States.
"People are thinking maybe there was an overreaction to the mad cow issue, and there is a little bargain hunting going on," said Edgar Peters, chief investment officer at PanAgora Asset Management, which oversees more than $11 billion.
Restaurant shares recovered a bit from losses earlier this week. McDonald's gained 12 cents to $24.08. Wendy's International Inc. (WEN) Wendy's added 20 cents to $37.99.
"A lot of stocks that were hurt by the mad cow case are starting to bounce a little bit today," said Stephen Massocca, head of trading and president at investment bank Pacific Growth Equities. "People don't think it's going to be as negative a story as once thought,"
Steakhouse chain Outback Steakhouse Inc. (OSI) rose 32 cents to $42.72. Rare Hospitality International Inc. (RARE), operator of LongHorn Steakhouse restaurants, advanced 31 cents, or 1.3 percent, to $24.
The U.S. Department of Agriculture (search) said on Thursday it was convinced that a Washington state dairy cow had mad cow disease after British scientists reviewed USDA tests on the slaughtered animal and concluded those tests were interpreted correctly.
Jack Caffrey, vice president and an equity strategist for J.P. Morgan Private Bank, said investors were making a distinction between processors, which may face higher testing and distribution costs for beef, and restaurants, which typically have diversified menus.
"You can go to Wendy's for the chicken, the salad and other things, too," Caffrey said.
He said he expected "more differentiation of results" going forward. While processors may be the first to face higher costs in dealing with mad cow fallout, those costs eventually could be passed on and affect the profits of restaurants and food retailers.
Tyson Foods (TSN) was down 29 cents at $12.61 after Morgan Stanley cut its investment rating to "equal weight" from "overweight" and cut its profits outlook. ConAgra Foods Inc. (CAG) fell 11 cents to $26.02, while Smithfield Foods rose 9 cents to $22.24.
Sharper Image (SHRP) , which sells high-end gadgets, leaped $2.42, or 8.1 percent, to $32.39. The company boosted its earnings forecast and said sales at stores open at least a year were up 21 percent through Christmas Eve.
Other retailers chugged higher on hopes that the holidays brought increased sales. Electronics chain Best Buy Co. Inc. (BBY) rose 83 cents, or 1.7 percent, to $50.56, and rival RadioShack Corp. (RSH) climbed 62 cents, or 2.1 percent, to $30.56.
"It being the day after Christmas, everyone will be trying to predict how holiday sales were," said Peter Boockvar, equity strategist at Miller Tabak & Co. "Everyone wants to see how the holiday spending season was compared to last year since the economy is now on surer footing."
Wal-Mart Stores Inc. (WMT) nosed up 8 cents to $52.52 after reporting a surge in last-minute holiday shoppers on the last two days before Christmas. But it was not enough to make up for a soft start to December, and the world's largest retailer said it still expects to hit only the low end of its sales forecast for the month.
U.S. steel companies climbed after China scrapped steel tariffs that had been in place for 13 months, a widely expected response to the Bush administration's decision to end its controversial tariffs on steel imports earlier this month.
Nucor Corp.(NUE), the largest U.S. steel producer, jumped $1.09, or almost 2 percent, to $56.44. United States Steel Corp. (X) climbed $1.24, or 3.6 percent, to $35.72.
Wall Street historically has a modest rally in the last five trading days of the year and the first two in January, according to the Stock Trader's Almanac (search). The so-called "Santa Claus rally (search)" has been good for an average 1.7 percent gain since 1969, or 1.5 percent since 1950.
The Dow has ended higher on the first trading day after Christmas in ten of the last 12 years, according to the Stock Trader's Almanac.
The Russell 2000 index of smaller companies advanced 2.55, or 0.46 percent, to 554.90.
Overseas, Japan's Nikkei stock average rose 0.5 percent to close at 10,417.41. The markets in Britain, Germany and France were closed.
Reuters and the Associated Press contributed to this report.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox