Early gains fade Friday, but stocks still rise for the week. The Dow ($INDU) tacked on 5.02 points during Friday’s session, closing at 10,345.40. The S&P 500 ($SPX) gave up 1.28 points to finish at 1,171.35. The Nasdaq ($COMPQ) added 5.55 points, or 0.28 percent, to 1,967.35. Despite the jobs data, volume was light on the session. The NYSE traded just 1.36 billion shares, with the Naz turning over but 1.54 billion shares. Market breadth was negative on the Big Board by a 16-to-17 margin, but was positive on the Naz by a 16-to-14 margin.
The big story Friday was the employment report, which came out well above expectations. Nonfarm payrolls rose by 274,000 in April and February and March were revised higher by 93,000. On average, payrolls have risen by 211,000 a month in 2005. Most economists viewed this report positively, but with bonds falling on the news, stock investors became nervous and sold into the weekend. It is somewhat disheartening to see stocks struggle despite such a positive report.
There was plenty of positive individual stock news as well from several blue chip firms. Honeywell (HON) shares rose 4.78 percent on the session on rumors United Technologies (UTX) was interested in buying the company. Boeing (BA) was another Dow gainer, up more than two percent after getting an order from Northwest Airlines (NWAC) for 18 planes.
Shares of Intel (INTC) rose 0.95 percent Friday following the company’s analyst meeting last night. The company continues to see double digit growth in 2005 after announcing profits of 25 percent in the first quarter. The company continues to benefit from its Centrino chip for laptops. Although business is good, shares of Intel are still trying to break through resistance near $25. However, the stock has gained ground in six consecutive sessions.
The Dow tested resistance today at 10,400, but it was unable to break through. The Naz also is struggling with resistance and the bulls were hoping today’s strong jobs report would do the job. Earnings have been strong and inflation is still in check, yet traders are unwilling to buy stocks en masse. Thus, we might be stuck in a trading range for another few months. However, option traders can still profit by using sideways trading strategies. If you’re not sure how these work, visit the Optionetics web site and study up on calendar spread, condors and butterflies.
Jody Osborne Senior Staff Writer & Options Strategist Optionetics.com ~ Your Options Education Site
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