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The Honolulu Advertiser

Posted at 11:53 a.m., Friday, May 28, 2004

Week of solid gains offsets weak finish

Hawai'i Stocks
Updated Market Chart

By Michael J. Martinez
Associated Press

NEW YORK — A strong consumer spending and earnings report wasn’t enough to fend off the pre-holiday doldrums on Wall Street today as stocks finished an uninspired session mixed. However, the major indexes managed a week of solid gains for the first time in over a month.

Profit-taking following the previous session’s rally kept prices lower as investors took a rare chance to lock in gains. Volume was low in advance of the Memorial Day holiday as well. In addition, some investors were looking forward to next Friday’s key employment figures to further bolster their bullishness.

"We’ve made some good progress in the past few days, but the market’s tired," said Russ Koesterich, U.S. equity strategist at State Street Corp. in Boston. "The market was oversold coming into mid-May. Investors have been nibbling, but we haven’t seen the kind of volume that would suggest that the institutions are really coming in."

The Dow Jones industrial average fell 16.75, or 0.2 percent, to 10,188.45. The index posted a gain of 95.31 yesterday.

Broader stock indicators were mixed. The Standard & Poor’s 500 index slipped 0.60, or nearly flat, to 1,120.68, and the Nasdaq composite index was up 2.24, or 0.1 percent, at 1,986.74.

For the week, the Dow gained 221.71, or 2.2 percent, the S&P rose 27.12, or 2.5 percent, and the Nasdaq was up 74.65, or 3.9 percent. It was the first positive week for the Dow and S&P after four straight weeks of losses, while the Nasdaq posted its second straight week of gains.

The past week also helped the markets finish the month on a positive note, leading some analysts to believe that the markets have finally reached their short-term lows and will move higher in June. For the month, the S&P rose 1.2 percent and the Nasdaq was up 3.5 percent, while the Dow was down just 0.4 percent.

For the year so far, the S&P was 0.8 percent higher, while the Dow was down 2.5 percent and the Nasdaq was off 0.8 percent.

The Commerce Department reported that consumer spending rose 0.3 percent in April, another solid gain after a 0.5 percent hike in March.

Even more encouraging, personal income rose by 0.6 percent in April, following a 0.4 percent increase in March — a sign that consumers will have more to spend in the future and can absorb some of the inflationary effects in the market, such as high oil prices.

Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co., attributed the sluggish performance to investors unwilling to make major new commitments ahead of the three-day weekend and with a threat of a terrorist attack looming.

"The best you can say is the market has held the gains of the week," Battipaglia said. "One has to come back to the notion that a very strong quarter profit-wise and very decent economic news suggests that there’s an underpinning in the market to hold at these levels."

Advancing issues outnumbered declining ones by about 3 to 2 on the New York Stock Exchange, where volume came to 1.17 billion shares, well below yesterday’s 1.44 billion.