All three major indices finished with gains Friday, after an up-and-down day. The Dow Jones Industrial Average rose 66.7 points (+0.5%), Standard & Poor's 500 index increased 7.6 points (+0.5%), and the Nasdaq finished up 18.7 points (+0.7%). Volume was well above Thursday's level at the NYSE with 1.77 billion shares being traded, and advancers beat decliners by a ratio of about 8:7.
The Nasdaq's outperformance could be attributed to Cisco's (+2.1%) announcement that its board approved tacking on an additional $10 billion worth of stock repurchases, making the total authorized buyback now $62 billion. The rest of the news was not so upbeat. Fed Govenor Kroszner implied the market should not expect another rate cut this year, saying, "The current stance of monetary policy should help the economy get through the rough patch during the next year." Industrial Production for October fell by 0.5%, well below the 0.1% increase economists expected. FedEx (-4.5%) said it was cutting its outlook on the quarter ending this month and for the full-year because of increasing fuel costs (full story). The U.S. 10-Year fell 7/32 in price, and now yields 4.17%.
Transportation (-0.9%) fell as crude jumped $1.67 to $95.10/barrel. Tech (+1.0%) and energies (+1.7%) finished with solid gains. Starbucks (-3.9%), Kohl's (+1.6%), and AnnTaylor (+3.4%) all reported earnings that met or beat expectations, but all three issued warnings on each's future performance because of the uncertain outlook in the U.S. economy (full stories: SBUX, KSS, ANN). Fortune Magazine made some serious allegations about Fannie Mae's (-5.5%) accounting practices, saying the lender was masking losses (full story).
No economic news is scheduled to be released Monday. Investors should see the moderate rally at the end of the day a positive sign: if there is a sharp move at the end of the week, it is traditionally down because traders do not want to go into the weekend with positions.
Have a great weekend!
Commentary: Outperformers During Declines Not Outperforming During Subsequent Recoveries • Inflation: Three Factors Clouding the Picture • Goldman Economist Sees $2 Trillion Subprime Impact on Lending
Stocks to watch: CSCO, FDX, SBUX, KSS, ANN, FNM