NEW YORK – Stocks rose Friday, with blue chips boosted by Ford Motor Co.'s (F) raised earnings forecasts and technology shares battling Qualcomm Inc. (QCOM)'s announcement that an accounting review may reduce pretax income. Surging oil prices and a mediocre consumer sentiment survey were keeping investor sentiment in check.
The Dow Jones industrial average (search) ended up 39.97 points, or 0.39 percent, at 10,284.46. The Standard & Poor's 500 Index (search) rose 5.05 points, or 0.45 percent, to 1,128.55. The technology-laced Nasdaq Composite Index (search) ended up 6.01 points, or 0.32 percent, at 1,910.09.
For the week, the Dow fell 0.3 percent, reversing five weeks of gains, while the S&P 500 was up 0.4 percent and the Nasdaq rose 0.8 percent. It was the sixth straight positive week for the S&P 500 and the second week of gains for the Nasdaq.
Oil stocks rose as crude oil futures surged almost $2 a barrel to their highest close in more than three weeks amid concerns over how Hurricane Ivan (search) and new storms might affect oil production. Some analysts worried that higher oil prices would hurt economic growth and cut into corporate profits outside the energy sector.
Exxon Mobil Corp. (XOM) rose 1.7 percent to $48.37 and ChevronTexaco Corp. (CVX) climbed 1.9 percent to $51.95. October crude on the New York Mercantile Exchange settled up $1.71, or 3.9 percent, at $45.59 a barrel.
"Oil continues to move higher -- this has been a stormy month and there's another one coming after Ivan," said Michael Murphy, managing director at Wachovia Securities.
"Considering how high oil has gotten, the market is acting pretty strong," said Todd Leone, managing director of equity trading at SG Cowen Securities. "I don't know how sustainable it is, but for now, it's nice to see."
Ford's positive outlook was somewhat of a surprise since the automaker announced cutbacks in production earlier this month. A number of large companies, especially in the technology and industrial sectors, have downgraded their earnings guidance for the third quarter due to soft demand, renewing worries on Wall Street that the summer's economic slowdown would persist.
Qualcomm's stock fell about 5 percent. The company said it may change the way it recognizes royalties from its licensees, which would reduce fourth-quarter pretax income by $298 million.
Trading was light throughout the session, since there was little new economic data or major earnings reports. Some investors were likely keeping to the sidelines in advance of Tuesday's Federal Reserve (search) meeting, where the Fed was widely expected to raise the nation's benchmark interest rate by a quarter percentage point. Interest rates currently stand at 1.5 percent.
The latest reading of the University of Michigan's consumer sentiment index gave investors another conflicting reading on the state of the economy. The index fell slightly to 95.8 in September, down from 95.9 in August, showing that consumers are still worried about jobs and incomes. Wall Street had forecast a 96.7 reading.
With consumer spending a key component of the economy, Michigan's latest reading on consumer sentiment was disappointing. Consumer spending has been skittish through the summer, especially for big-ticket items like appliances and cars, due to high energy prices that have persisted through September.
That will make the Fed's statement, released after its meeting, even more important to Wall Street than usual. Without a clear indication of the economy's direction, the market rally of the past six weeks could be in jeopardy, analysts said.
"We're starting to see a lot of oversold indicators after the recent runup we've had, and that's got to be making investors nervous," said Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research. "To get us past these levels, it's going to take a lot more than a good outlook by Ford."
Ford did not cite increased sales as a factor in its improved outlook. The automaker said its third quarter and full-year earnings would be higher than expected due to improved cost efficiency and strong results from its financial services business. Ford was up 27 cents at $14.22.
Cell phone component maker Qualcomm slid $1.57 to $38.83 even as the company raised its fourth-quarter and full-year earnings estimates due to strong sales. However, Qualcomm said it would have to adjust the way it accounts for royalties, which could result in lower revenue figures going forward.
Altria Group Inc. (MO) fell almost 1 percent to $48.48, making it one of the biggest drags on the blue-chip Dow Jones index. The Los Angeles Times reported that California's top court has for the first time upheld a damages award in a smoking and health case.
The newspaper said the court dismissed an appeal by Altria's Philip Morris USA (search) of a $10.5 million judgment won by a lung cancer victim and longtime Marlboro cigarettes smoker.
Internet conglomerate InterActiveCorp. (IACI) rose almost 7 percent to $23.50 on market rumors that Chief Executive Barry Diller was taking the company private, analysts said. A spokeswoman for InterActiveCorp declined to comment.
Texas Instruments Inc. (TXN) rose 49 cents to $22.08 after the semiconductor and electronics manufacturer authorized a $1 billion stock repurchase plan. The company also increased its quarterly dividend to 2.5 cents from 2.125 cents.
Losses at electronics retailer Circuit City Stores Inc. (CC) shrunk substantially in the latest quarter, with the company reporting a loss of 6 cents per share, compared with 63 cents per share a year ago. Wall Street had expected a loss of 11 cents per share. Circuit City gained 61 cents to $14.72.
Knight Ridder Inc. (KRI) slipped 9 cents to $63.50 after the media company said its third-quarter earnings would exceed Wall Street forecasts due to a one-time tax-related gain, but would have otherwise fallen to a loss due to damage sustained at the company's Florida properties due to the hurricanes there.
The Russell 2000 index of smaller companies was down 1.38, or 0.2 percent, at 573.16.
Overseas, Japan's Nikkei stock average lost 0.5 percent. In Europe, Britain's FTSE 100 closed up 0.8 percent, France's CAC-40 rose 0.9 percent for the session, and Germany's DAX index gained 0.6 percent.
Reuters and the Associated Press contributed to this report.