Sun, Jun 27, 2004 - Page 10 News List

Wall Street worries over GDP figures

MIXED SIGNALS Both the Dow Jones Industrial and the S&P 500 finished down, while the NASDAQ and Russell 2000 closed the week's trading higher


A weaker GDP figure and a flurry of late-day trading left stocks widely mixed Friday, with tech issues and small caps gaining as blue chips suffered. The major indexes also finished the week mixed.

"I think at this point, a half-point raise is off the table," said Daniel Portanova, managing director at Gartmore Separate Accounts in Irvington, New York. "And I think the market will be comfortable with a quarter-point rate hike, especially after seeing this number."

The market suffered some volatility in the last hour of trading as institutional investors adjusted their portfolios to reflect the annual rebalancing of the Russell indexes.

The Dow Jones Industrial Average fell 71.97, or 0.7 percent, to 10,371.84.

Broader stock indicators were mixed. The Standard & Poor's 500 index was down 6.22, or 0.6 percent, at 1,134.43, and the NASDAQ composite index gained up 9.90, or 0.5 percent, at 2,025.47. The NASDAQ is home to many small cap stocks, which are measured by the Russell 2000 index.

The Russell 2000 was up 8.65, or 1.5 percent, at 587.70.

For the week, the Dow lost 0.4 percent and the S&P 500 dropped 0.1 percent, while the NASDAQ gained 2 percent. The Dow reversed a four-week run of gains and the S&P 500 had its second consecutive losing week. The NASDAQ reversed last week's decline.

The Commerce Department's GDP figure, which measures the value of all goods and services produced in the nation, was less than the 4.4 percent economists expected. The lower figure was blamed on a spiraling trade deficit as well as a moderation in consumer spending.

Spending on previously owned homes was not moderate, however. The National Association of Realtors reported sales of existing homes climbed to a record annual rate of 6.8 million homes in May, up 2.6 percent from April.

Despite the new data, however, volume remained low as investors looked to the Fed meeting and the handover of power in Iraq next week before making any large moves on the markets.

"You've got a Friday in the summertime, which normally means low volume anyway, and you have these major events next week," said Jay Suskind, head trader at Ryan Beck & Co. "Everybody's sensing after these big events, if all goes according to plan maybe we move into a summer rally mode. So it's a kind of wait and see."

Clothing and sporting goods manufacturer Nike Inc jumped US$2.91 to US$75.31 after posting a 21 percent rise in quarterly profits and handily beating Wall Street earnings expectations by US$0.05.

Countrywide Financial Corp fell US$0.21 to US$71.09 after the company board approved a 2-for-1 stock split, to be paid in the form of a stock dividend.

Advancing issues barely outnumbered decliners on the New York Stock Exchange, where preliminary consolidated volume came to 2.11 billion shares, compared with 1.75 billion on Thursday.

The Dow Jones Industrials ended the week down 44.57, or 0.4 percent, finishing at 10,371.84. The S&P 500 index lost 0.74, or 0.1 percent, to close at 1,134.43.

The NASDAQ gained 38.74, or 2 percent, during the week, closing Friday at 2,025.47.

The Russell 2000 index, which tracks smaller company stocks, closed the week 17.16, or 3 percent, higher, at 587.70.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top