Friday opened lower as traders pocketed profits from Thursday's
triple-digit rise in the Dow Industrials. More selling developed
after a disappointing retail sales number, but buyers appeared
following a better-than-expected consumer sentiment number,
offsetting the early losses. When the closing bell sounded, all of
the major indices had a slight gain.
The retail sales report was the worst in months, with May retail
sales falling 1.2% compared to an expected gain of 1.1%. However,
the University of Michigan's preliminary consumer confidence survey
exceeded expectations of 74.5 by scoring a two-year high of 75.5.
The only other report was for business inventories for April, which
increased 0.4% and had little impact on trading.
Of the 30 stocks in the
Dow Jones Industrial Average
), 20 closed higher.
) led the list with a gain of 3.89%, Microsoft Corporation (NASDAQ:
) rose 3.80%,
The Boeing Company
) was up 2.29%, and
) rose 1.84%.
The Dow gained 2.81% for the week, breaking a three-week streak
of losses. But the Dow is still down 2.08% for the year.
Goldman Sachs Group, Inc.
), in a note to clients, said that "BP shares now have as much
upside potential as the rest of the European integrated oil
sector." The stock rose 3.6%.
National Semiconductor Corporation
) rose 5% after the company reported a Q4 profit.
Research In Motion Limited
) fell 0.7% after saying that the company will pay
) in order to resolve litigation between the two companies; MOT
The U.S. dollar rose against the euro and a basket of other
currencies despite the weaker retail sales numbers. The euro fell
to $1.20087 and is down 16% so far this year.
The Dow closed at 10,211, up 39 points, the
) gained 5 points to 1,092, and the
) added 25 points at 2,244.
The NYSE traded just over 1 billion shares with advancers over
decliners by almost 3-to-1. The Nasdaq crossed 507 million shares,
and advancers there were ahead by about 2.5-to-1.
Crude oil for July delivery fell $1.70 to $72.78 a barrel. The
Energy Select Sector SP
) rose 33 cents to $54.32.
August gold rose $8, closing at $1,230.20 an ounce, and the
PHLX Gold/Silver Sector Index
) gained 0.32 points to 175.31.
What the Markets Are Saying
How many tests of a support zone does it take to make a
successful bottom? Since October, the S&P 500 has had from four
to seven tests, at least three at the 1,050 support line in the
Most of those sell-offs were due to bad international news, but
not all. After the bizarre sell-off on May 6, which many said was
the result of computer error, we were told that it was unlikely to
be repeated. But the unsettling thing is that the low of May 6 was
swiftly penetrated -- and not only once, but on seven different
days after that.
And most of the bounces (not yet rallies) resulted from either
better news or short sellers covering positions -- not the
generally accepted characteristics of bottom making. I'd much
rather see the market rally on bad news or even no news at all.
Then there is the volume factor: On every day up last week,
volume was lower than on days down. On Thursday's 273-point Dow
rally, the NYSE traded just 1.3 billion shares, and on Friday's
"follow-through," just over 1 billion shares. But on June 4, with
the Dow off 323 points, volume was 1.6 billion shares.
If buyers are successful in putting together a broad-based,
high-volume series of strong days up that are powerful enough to
penetrate the overhead at the 200-day averages of the major
indices, we could conclude that a bottom may have been successfully
Until then, the best that can be said is that the market is
trading in a very narrow range that is defined by sellers and
buyers who are traders and not investors. When the solid investors
arrive, we will know them by the volume that accompanies their
Today's Trading Landscape
Earnings to be reported before the opening
Earnings to be reported after the close include:
Korn/Ferry, La-Z-Boy, MDS and Rentrak.
There are no significant economic reports due today.
If you have questions or comments for Sam Collins, please
e-mail him at
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