NEW YORK – Stocks wavered through another choppy session Friday as investors, worried over the level of the market after an 11-month run-up, tried to reconcile conflicting economic data — a surprisingly strong gross domestic product figure and a drop in a consumer confidence measure.
The major indexes ended February mixed, stalling an 11-month rally, and the Nasdaq composite index suffered its first monthly decline since September.
The Dow Jones industrial average (search) closed up 3.78 points, or 0.04 percent, at 10,583.92. The broader Standard & Poor's 500 Index (search) rose 0.03 point to 1,144.94. The technology-focused Nasdaq Composite Index (search) fell 2.75 points, or 0.14 percent, to 2,029.82.
For the week, the Dow fell 0.3 percent, the S&P 500 rose 0.1 percent and the Nasdaq fell 0.4 percent. It was the second down week for the Dow, and the sixth straight losing week for the tech-dominated Nasdaq.
For the month, the Dow rose 0.9 percent, the S&P 500 rose 1.2 percent, but the Nasdaq fell 1.8 percent. That makes the third up month in a row for the Dow and the fifth up month for the S&P 500. Nasdaq's losing month snapped a string of four up months.
Each of the stock gauges are up for the year, but off long-time highs set in January and early February 2004.
The day's trading continued the listless pattern that marked Wall Street's performance throughout February. Strong, early gains were eroded by profit-taking on tech stocks, but the markets recovered somewhat by the afternoon.
"We saw some selling in semiconductors that took everything with it, but there's no real reason behind it," said Larry Wachtel, market analyst at Wachovia Securities. "It's a quirky kind of market."
Wachtel added that until economic data provides a stronger indication of the pace of the recovery, the wavering market will likely continue. The government's jobs creation report expected next Friday could move the markets again, analysts said.
For the month of February, the Nasdaq lost 1.8 percent. The Dow gained 0.9 percent and the S&P 500 climed 1.2 percent. — the fifth straight monthly advance for both indexes.
February lived up to its reputation as the weakest month for the stock market. But in spite of widespread expectations that stocks could retreat during the month, there was still disappointment that Wall Street's rally of the past year had gone into at least a temporary limbo.
Some of the declines for the month came from a letdown after a solid fourth-quarter earnings season. But there also was confusing economic data that deprived the market of guidance for the near future.
On Friday, traders were pleased by the Commerce Department's (search) report that the economy grew by an unexpected 4.1 percent annual rate in the last quarter of 2003. The government's latest data on the gross domestic product — the broadest measure of the economy's health — beat the 3.8 percent growth forecast by economists. GDP reflects the value of all goods and services produced within the United States.
Initially, Wall Street did not seem dissuaded by the University of Michigan's (search) latest consumer confidence report. The school's consumer sentiment index for February slid to 94.4, versus 103.8 in January. The reading was in line with Wall Street expectations, however.
"If you look at it historically, there's a real disconnect between what consumers tell you versus what they actually do," said Scott Wren, equity strategist for A.G. Edwards & Sons. "Consumers are continuing to spend money in this economy."
PeopleSoft Inc. (PSFT) lost 20 cents to $21.58 on news that the Justice Department is seeking to block a hostile $9.4 billion bid by its larger rival, Oracle Corp. The government's suit contends the merger would stifle competition in the business software market. Oracle slipped 41 cents to $12.87.
Payless ShoeSource Inc.(PSS), among many retailers releasing earnings this week, jumped 99 cents to $13.35 after reporting a fourth-quarter loss that wasn't as bad as Wall Street anticipated.
Luxury hotel chain Four Seasons Hotels Inc. (FS) dropped $1.43 to $54.27. Its fourth-quarter earnings rose 53 percent, but said revenues were down slightly due to terrorism and SARS concerns. The company gave an upbeat outlook for 2004, however.
The Dow was lifted by Boeing and United Technologies, making up some of their losses earlier in the week after the U.S. Army's decision on Monday to cancel the $39 billion Comanche helicopter project, a joint venture between United Technology unit Sikorsky and Boeing.
Autodesk Inc. (ADSK) led the S&P 500 in gains after it posted higher fourth-quarter income and revenue on strong sales of its computer-aided design software. Its shares rose $2.79, or 10.7 percent, to $28.76.
The Nasdaq was held in check by Genzyme Corp. (GENZ), which said on Thursday it would acquire Ilex Oncology Inc. for about $1 billion to expand its cancer drug business. Genzyme shares fell $2.83, or 5.3 percent, to $50.45.
Trading was moderate, with 1.5 billion shares changing hands on the New York Stock Exchange, just above the 1.4 billion daily average for last year. About 1.9 billion shares were traded on Nasdaq, just ahead of the 1.8 billion daily average last year.
Advancers outnumbered decliners by 2 to 1 on the NYSE and by 6 to 5 on Nasdaq.
The Russell 2000 index, which tracks smaller company stocks, was up 1.70, or 0.3 percent, at 585.56.
Overseas, Japan's Nikkei stock average finished 2.1 percent higher Friday. France's CAC-40 finished 0.3 percent higher, Britain's FTSE 100 lost 0.5 percent for the session and Germany's DAX index closed up 0.3 percent.
Reuters and the Associated Press contributed to this report.