NEW YORK – U.S. stocks ended lower on Friday, hurt by computer maker Dell Inc.'s (DELL) disappointing earnings outlook and unexpected strength in producer prices that may signal inflation.
Shares of Dell slid 4.9 percent to $30.38 on Nasdaq after the world's largest personal computer maker forecast first-quarter results below analysts' expectations and Banc of America Securities cut its rating on the stock.
"Dell, in terms of the outlook number, [is] definitely pulling down not only that stock but technology in general," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Wealth Management.
The Labor Department's core Producer Price Index, excluding volatile food and energy prices, climbed 0.4 percent in January — twice market expectations. The headline PPI number rose 0.3 percent, also higher than forecast.
Rising prices fuel investors' fears the Federal Reserve will have to keep raising interest rates to tame inflation.
The Dow Jones industrial average was down 5.36 points, or 0.05 percent, at 11,115.32. The Standard & Poor's 500 Index was down 2.14 points, or 0.17 percent, at 1,287.24. The Nasdaq Composite Index was down 12.27 points, or 0.53 percent, at 2,282.36.
For the week, the Dow gained 1.8 percent, the S&P 500 rose 1.6 percent and the Nasdaq added 0.9 percent.
"We're basically consolidating what has been a favorable week," said Todd Clark, director of stock trading at Nollenberger Capital Partners in San Francisco. "We've had some strong economic data and a pretty good decline on crude for the week."
U.S. crude prices marched higher on Friday, with the benchmark March futures contract jumping $1.42 to settle at $59.88 a barrel ahead of the three-day holiday weekend. Earlier this week, oil fell below the $60 mark for the first time in 2006 and eased some inflation fears, helping to push the Dow average to a 4 1/2-year high of 11,131.95.
Helping stem the Dow's decline was Honeywell International Inc. (HON). Shares of the industrial conglomerate climbed a day after it announced a change in its accounting practices. Some analysts said the move would make Honeywell's financial statements more transparent.
Honeywell's stock gained 1.4 percent, or 60 cents, to $42.18 on the New York Stock Exchange. Earlier, it climbed to $42.93, a 4 1/2-year high.
Shares of RadioShack Corp. (RSH) slumped 8.1 percent, or $1.67, to $19.08, its biggest one-day percentage drop in 11 months. Earlier, the stock slid to $18.80, a 3-year low. The electronics retailer posted fourth-quarter earnings below analysts' estimates and announced hundreds of store closings.
Earlier this week, RadioShack Chief Executive David Edmondson admitted to lying on his resume about his academic record.
Shares of American International Group Inc. (AIG) were among the biggest drags on the Dow as investors worried about recent sales of the company's stock by Starr International Co., a company owned by former AIG Chairman and Chief Executive Maurice "Hank" Greenberg.
Starr has sold 900,000 shares worth more than $61 million in the last week. Greenberg, who resigned from AIG last year amid an investigation of his accounting practices, has several court cases pending against AIG.
AIG shares slipped 1.1 percent, or 76 cents, to $67.42.
The University of Michigan said its preliminary February consumer sentiment index fell to 87.4, below economists' expectation for a rise to 91.5 and below January's 91.2.
Trading was light on the NYSE, with about 1.57 billion shares changing hands, below last year's daily average of 1.61 billion, while on Nasdaq, about 1.95 billion shares traded, above last year's daily average of 1.80 billion.
Advancing stocks outnumbered declining ones by a ratio of 9 to 7 on the NYSE. But on Nasdaq, decliners topped advancers by a ratio of about 8 to 7.
The U.S. bond market and the U.S. oil futures market closed early on Friday. All U.S. financial markets will be closed on Monday for Presidents Day.