MARKET REPORT
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Softness in computer chip issues was the only blemish in an otherwise quiet
but positive day for U.S. stocks Friday. The day capped the first winning
week for the markets since the last week of August.
All major small cap indexes rose, with the bellwether Russell 2000 Index
gaining 6.15 points, or 1.3%, to 487.45, and the Wilshire Small Cap 1750
advancing 12.92, or 1.6%, to 817.61. The S&P 600 gained, too, picking up
2.45 points, or 1.2%, to 208.73. The markets continued building on
Thursday's momentum, which had analysts talking about an end to the autumn
sell-off.
The Philadelphia Semiconductor Index, however, ended lower, losing 5.87, or
0.8%, to 752.87, after vaulting 111.44 in the previous day's session. The
tech laden Nasdaq Composite Index fared better, gaining 64.54, or nearly
2%, to 3483.14, following on Thursday's near 50-point rise.
"The softness in semiconductors is to be expected after yesterday's
run-up," said Peter Coolidge, head trader for Brean Murray & Co. "But other
technology stocks are still playing catch-up to Thursday's phenomenal run-up."
As for the broader market, "what we're seeing here is a nice bounce back
from an oversold condition," said Charles White, portfolio manager at
Avatar Associates. "But it is by no means a declaration that we're
completely out of the woods."
White noted that November's elections are still three weeks away, and
concern over energy prices and a downturn in the manufacturing sector still
could negatively influence the market.
Thursday's "Philly Fed report shows there's some real significant weakness
out there for the first time in a long time, to where we're starting to
think about contraction in the U.S. economy," White said.
Blue chip stocks headed higher after a weak opening. The Dow Jones
Industrial Average gained despite softness in United Technologies Inc.
(NYSE: UTX), which ended the day down 4.4% to 65.
The conglomerate made news late Thursday after it was reported to be in
discussions to buy rival Honeywell International Inc. (NYSE: HON) for $40
billion. By the end of trading Friday, United Technologies did an
about-face and said it was terminating its merger proposal, causing its
share price to rise from an intraday low of 59 7/8. At the same time
Honeywell, also a Dow component, soared 29% after it said it was
considering other buyout offers after UT bowed out.
The Dow industrials ended the day up 83.61, or 0.8%, to 10226.59, while the
broader S&P 500 advanced 8.14, or 0.6%, to 1396.90.
Aerospace-allied small cap issues ended mixed, as shares of Alliant
Techsystems Inc. (NYSE: ATK) eked out a 1.1% rise, or 15/16, to 89 1/16,
and Curtiss Wright Corp. (NYSE: CW) gained 1 9/16, or 3.4%, to 47 7/16.
Hexcel Corp. (NYSE: HXL), however, down shifted, dropping 15/16, or 8.8%,
to 9 11/16.
Brean Murray's Coolidge noted that today was a double-witching Friday, a
day on which both stock and stock-index options expire. Despite that,
Friday was a "quiet day," Coolidge said.
"It was a pretty volatile, rough week, and some players in the market are
sitting on the sidelines," he said.
Shares of Microsoft Corp. (NASDAQ: MSFT), which helped drive the market
much higher yesterday, continued heading higher in trading Friday, with
shares advancing 5.4% to $65.19 a share.
In Canadian trading, the Toronto Stock Exchange continued yesterday's
upward trend, gaining strongly to end at 10485.20, up 253.60, or 2.5%,
while the Canadian Venture Exchange advanced 30.59 points, or 0.9%, to 3320.37.
In the currency markets, the Canadian dollar dropped 0.1% to US$0.6610 from
US$0.619, while the euro at Friday 4 p.m. ET trading edged up to US$0.8414.
In commodities news, crude oil futures rose after heading lower Thursday.
November crude futures gained $1.05 cents, or 3.3%, at $32.95, while
November natural gas futures slid a penny to $4.95, off 0.2%. December gold
gained $1.10, or 0.4%, to $273.40.
AI
