NEW YORK – Stocks fell Friday as investors were hit by a worse-than-expected report on consumer sentiment, along with troubling numbers on import prices and a widening trade gap. Disney also led the Dow lower.
The Dow Jones industrial average (search) ended down 66.22 points, or 0.62 percent, at 10,627.85. The broader Standard & Poor's 500 Index (search) closed down 6.30 points, or 0.55 percent, at 1,145.81. The technology-focused Nasdaq Composite Index (search) finished down 20.05 points, or 0.97 percent, at 2,053.56.
For the week, the blue-chip Dow gained 0.3 percent and the broad S&P 500 also advanced 0.3 percent. But the Nasdaq slipped 0.5 percent.
The dip sealed the fourth straight week of declines for the Nasdaq. The Dow and S&P 500 have gained in each of the past two weeks.
The day's negatives overshadowed strong earnings from technology bellwether Dell Inc.
Stocks have dipped for two straight sessions after a rally on Wednesday, fueled by Federal Reserve Chairman Alan Greenspan who said the economy was growing vigorously but suggested no interest-rate hike was imminent. His comments helped drive blue-chip stocks to 32-month highs.
Investors are now doubting some of Greenspan's upbeat review of the economy, said John Davidson, president of Partner Re Asset Management Corp.
"If consumer confidence is falling and the weekly jobs claims actually rose, most of the actual news this week was not that good on the economy despite the fact that Greenspan said it was pretty good," he said.
Next week is a shortened week for trading, as U.S. stock markets are closed Monday to mark Presidents Day.
Friday's pullback started after the University of Michigan said its preliminary reading of consumer sentiment tumbled to 93.1 in February from January's final reading of 103.8, its highest level in more than three years. Economists had forecast a reading of 103.3.
"The meat of the story is consumer sentiment," said Tom Schrader, managing director of U.S. equity trading at Legg Mason Wood Walker. "It just took a while to set in that things are not as rosy as anticipated."
"The consumer confidence and the trade figure was not good news," said Peter Cardillo, senior vice president and chief market analyst for S.W. Bach & Co. "But this doesn't necessarily reverse the bullish sentiment in the market."
That overshadowed higher quarterly earnings from Dell, which said Thursday it sees its profit in the current quarter in line with Wall Street expectations and expects steady growth in technology spending this year. Dell Inc. (DELL) jumped 98 cents to $34.55 . Video microchip maker nVidia Corp. (NVDA) fell 22 cents to $23.30 after it beat Wall Street expectations by 3 cents per share.
Comcast Corp.'s (CMCSA, CCZ)proposed $54 billion hostile takeover of The Walt Disney Co. (DIS) continued to intrigue investors as Disney promised to give the bid full due diligence. Comcast slipped 16 cents to $29.90, while Disney fell $1.08 to $26.92 after two days of strong gains. Microsoft Corp., down 36 cents at $26.59, and Time Warner Inc., down 19 cents at $17.24, have been mentioned as possible white knights for Disney.
The most heavily traded issue on the New York Stock Exchange was AT&T Wireless (AWE) , as Vodafone Group Plc (VOD), the world's top wireless operator, and U.S rival Cingular ready for a head-to-head battle to take control of AT&T Wireless.
AT&T Wireless shares rose 15 cents, or 1.2 percent, to $11.82. Vodafone's ADRs, or American Depositary Receipts, rose 85 cents, or 3.4 percent, to $25.76.
Safeway Inc. (SWY)dropped 6 cents to $22.43. The grocer, already struggling with a major labor strike in California, posted a loss of $1.57 per share, but beat analysts' estimates for operating profits.
Pharmaceutical company Cephalon Inc.'s (CEPH)earnings fell sharply from the year-ago quarter, when it benefited from a large tax gain. Earnings were in line with analysts' expectations, and Cephalon shot up $1.84 to $57.20.
Trading was average, with 1.3 billion shares changing hands on the NYSE, below the 1.4 billion daily average for last year. About 1.8 billion shares were traded on Nasdaq, in line with the daily average last year.
Decliners outnumbered advancers by about 5 to 3 on the NYSE and about 2 to 1 on Nasdaq.
The Russell 2000 index of smaller companies was down 5.25, or 0.9 percent, at 587.50.
Overseas, Japan's Nikkei stock average rose 0.9 percent. In afternoon trading, Britain's FTSE 100 was up 0.8 percent, Germany's DAX index fell 1.6 percent, and France's CAC-40 dropped 0.9 percent.
Reuters and the Associated Press contributed to this report.