The NASDAQ composite posted a fifth straight week of gains -- its longest streak since December 2001 -- on a day of modest declines Friday, when investors played it safe and cashed in their profits.
Analysts said a pair of downbeat government reports stirred some concerns of a tepid economic recovery, while a disappointing outlook from Dell weighed on tech shares. Still, investor optimism remained high, helping to limit Friday's losses.
"We've had a great run since the end of the war, and I'm astounded how the market has held these gains," said Steve Kolano, an equity trader at The Boston Co Asset Management.
"Investors are ready to turn the corner," he added. "But I am getting a little concerned that this rally is a bit overdone. We haven't seen hard evidence yet the economy is ready to turn."
The NASDAQ closed down 12.85, or 0.8 percent, to 1,538.53. The S&P declined 2.37, or 0.3 percent, to 944.30.
Blue chips also finished lower. The Dow fell 34.17, or 0.4 percent, at 8,678.97, having gained 65 points the previous session.
For the week, all three main gauges finished higher, with the Dow up 0.9 percent, the NASDAQ higher 1.2 percent and the S&P 500 up 1.2 percent. It was the fifth winning week for the S&P 500, its best performance since August 2002. The Dow posted a third week of gains, a feat not seen since November 2002.
On Friday, Dell fell US$0.99 to US$31.19 after the computer maker reported quarterly profits that met analysts' expectations; however, it also said it does not expect a major turnaround in the tech market, and a Smith Barney analyst downgraded the company's stock, citing overvaluation.
"Dell's numbers didn't blow anything out of the water," said Russ Koesterich, US equity strategist at State Street Corp. "The growth isn't really coming from significant revenue growth, but from cost-cutting. For the market to go really higher, we need to see that companies like Dell can grow the top line."
Two economic reports also prompted some selling.
The US Department of Labor reported consumer prices fell by 0.3 percent in April, the biggest decline in 18 months and deeper than the 0.1 percent dip analysts were predicting. The reading suggests inflation isn't a concern, although deflation might be.
And the US Department of Commerce said the number of new housing projects builders started last month dropped by 6.8 percent to a seasonally adjusted annual rate of 1.63 million, indicating the once-hot sector is losing momentum.
Stocks have enjoyed strong gains in recent weeks after upbeat first-quarter earnings and the end of the war with Iraq bolstered hopes of a rebounding economy. Still, while investors are largely optimistic, analysts say the market remains vulnerable to bursts of profit-taking.
"The big question you have to ask is what is the next catalyst," Koesterich said. "It's the end of the earnings season and most of the economic numbers are done for the rest of the month."
"Short of technical reasons, there aren't a lot of catalysts," he added. "We're likely to churn at these levels and try to digest these gains."
General Motors lost US$0.47 cents to US$34.41 after Prudential Financial cut the automaker's stock rating to "sell" from "hold," citing the company's declining market share.
Gainers included AT&T, which rose US$0.68 to US$18.12.
And Kohl's rose US$0.38 cents to US$53.40 after the retailer posted quarterly earnings that were in line with Wall Street's estimates.
Declining issues narrowly outnumbered advancers on the New York Stock Exchange. Volume was moderate.
The Russell 2000 index, which tracks smaller company stocks, fell 7.33, or 1.7 percent, to 414.72.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure