NEW YORK – Technology stocks slipped and the broader market finished virtually unchanged Friday as investors, while largely pleased with reports on consumer sentiment and spending, took a breather from the previous session's massive gains.
The Dow Jones industrials and Nasdaq composite posted weekly gains for the first time since early March.
The Dow Jones industrial average (search) slipped 5.85 points, or 0.06 percent, to 10,212.97. The Standard & Poor's 500 Index (search) dipped 1.13 points, or 0.10 percent, to 1,108.06. The technology-laced Nasdaq Composite Index (search) fell 7.15 points, or 0.36 percent, at 1,960.02.
For the week, the Dow and Nasdaq ended higher, rising 0.26 percent and 1.01 percent, respectively. The S&P 500 slipped 0.16 percent. The rise snapped two weeks of losses for the Dow and Nasdaq, but it was the third straight down week for the S&P 500.
"It certainly looked like people wanted to reduce some of their exposure after the last few days, particularly with the strong rally yesterday and the nice rally through most of today," said Jack Caffrey, equity strategist at JP Morgan Private Bank.
Investors were initially reassured by the University of Michigan's (search) consumer sentiment index, which rose to 95.8 in March from 95.4 in February, according to media reports on the index. The hike could mean consumers may be willing to spend more, boosting the economy.
A continued daily dose of strong economic reports and earnings could spark the buying Wall Street has been waiting for, according to Brian Belski, market strategist at Piper Jaffray.
"The market looks like it wants to rally into earnings and throughout the earnings season, and we could be back to focusing on inherent fundamentals like earnings and valuation," Belski said. "We're in a day-to-day, micro-reactive market that jumps on each little bit of news. If that news continues to be positive, we're in good shape."
The Commerce Department (search) report on consumer income and spending, while not entirely positive, was still good enough to support Michigan's findings. Consumer income was up 0.4 percent in February, up from the 0.3 percent rise reported in January and slightly better than economists expected.
However, consumer spending rose 0.2 percent, down from the 0.5 percent gain in January. While less than Wall Street expected, consumer spending still managed to make gains, analysts said, showing that the recent economic troubles have not stopped consumers from making purchases.
The biggest coming indicator, however, is next week's payroll report, which analysts are hoping will be better than expected.
"If we get any kind of upside surprise in the jobs report, this market's really going to take off," Belski said.
Until then, however, the stock markets will likely remain somewhat stagnant unless another major, unexpected world event occurs.
"The market is going to be a wait-and-see pattern until we get payroll and earnings," said Keith Keenan, vice president of institutional trading at Wall Street Access. "Short-term, the market does appear to be somewhat oversold, so there's probably not too much more to expect on the downside, unless earnings are disappointing."
The Nasdaq Composite, which had its biggest gain in nine months on Thursday, was pulled down by Intel Corp. (INTC) and Microsoft Corp. (MSFT). Intel, the world's largest chip maker, fell 41 cents, or 1.5 percent, to $27.38. Microsoft, the world's largest software maker, fell 16 cents, or 0.64 percent, to $25.03.
They were among the biggest percentage losers on the Dow and were the two most actively traded stocks on the Nasdaq.
E+Trade Financial Corp. (ETRD) gained 40 cents to $13.10 after the company was added to the S&P 500 index. The online brokerage and banking company was also upgraded to "strong buy" by Raymond James.
Albertsons Inc. (ABS) said it would buy a U.S. unit of Britain's J Sainsbury Plc for $2.5 billion as the two grocers look for ways to fend off competition from Wal-Mart Stores Inc. Albertsons fell 78 cents, or 3.4 percent, to $21.88. It was among the biggest percentage losers on the NYSE.
General Electric Co. (GE) shares helped offset some of the Dow's losses after Merrill Lynch said it added GE to its list of top stock picks. GE rose 40 cents, or 1.3 percent, to $30.10 and was among the Dow's biggest percentage gainers.
Hewlett-Packard Co. (HPQ) has filed suit against rival computer maker Gateway Inc., according to media reports, alleging infringement of six patents covering a variety of personal computer technologies. H-P fell 12 cents to $22.27, while Gateway dropped 10 cents to $5.30.
EchoStar Communications Corp. (DISH) , which operates the No. 2 U.S. satellite TV broadcaster Dish network, fell after it reported a fourth-quarter profit. The company added new subscribers at a stronger pace than expected, but analysts said the gains came at a high cost. Shares of EchoStar fell 94 cents, or 2.7 percent, to to $33.70.
Yahoo Inc. (YHOO) shares rose after the Internet media company said it would buy European price comparison Web site Kelkoo SA for about 475 million euros ($575 million) in cash. The deal helps Yahoo to expand overseas. Yahoo shares rose 19 cents to $47.13.
Trading was light, with 1.32 billion shares changing hands on the New York Stock Exchange, below the 1.4 billion daily average for last year. About 1.58 billion shares were traded on Nasdaq, below the 1.8 billion daily average last year.
Advancers outnumbered decliners 6 to 5 on the New York Stock Exchange. Advancers and decliners were evenly matched on the Nasdaq.
The Russell 2000 index of smaller companies rose 1.39, or 0.2 percent, to 572.92.
Overseas, Japan's Nikkei stock average jumped 2.1 percent. In afternoon trading, Britain's FTSE 100 closed down 0.4 percent, France's CAC-40 gained 0.6 percent for the session and Germany's DAX index rose 0.3 percent.
Reuters and the Associated Press contributed to this report.