February 23, 2007
Stocks Fall as Oil, Bonds Rise
Crude futures pushed to their 2006 high before paring gains. Elsewhere, Microsoft lost a $1.52 billion patent-infringement rulingStocks finished lower in lackluster trading Friday, as investors digested fluctuating oil prices, rising bond prices, and a lack of economic data. Worries over rising subprime mortgage defaults weighed on investment banking and thrift mortgage stocks. Traders were bracing themselves for next week's heavy slate of economic reports, says Standard & Poor's Equity Research.
On Friday, the Dow Jones industrial average fell 38.54 points, or 0.3%, to 12,647.48, declining for a third straight day. The broader Standard & Poor's 500 index dropped 5.18 points, or 0.36%, to 1,451.2. The tech-heavy Nasdaq composite was down 9.84 points, or 0.39%, to 2,515.1.
NYSE breadth was slightly negative, with 17 issues declining for every 16 advancing. Nasdaq breadth was 17-13 negative.
Oil prices climbed to their highest level this year on geopolitical tensions before paring gains. In the energy markets, April West Texas Intermediate crude oil futures rose 19 cents to $61.14 a barrel, after rising as much as 57 cents to $61.52.
Among Friday's stocks in the news, Microsoft (MSFT) was lower after a San Diego jury ruled the software giant must pay $1.52 billion in patent-infringement damages to Alcatel-Lucent (ALU).
On the earnings front, Intuit (INTU) was slightly higher after the personal finance software maker reported a 21% drop in fiscal second-quarter profit.
H&R Block (HRB) was higher after the tax preparer posted a fiscal third-quarter loss and said it plans to sell its Option One mortgage unit for $1.3 billion by the end of March.
Lowe's (LOW) was also up as the home-improvement retailer's 12% decline in fourth-quarter earnings topped analyst expectations.
Clear Channel Communications (CCU) was little changed on a better-than-expected 54% drop in fourth-quarter profit ahead of its planned buyout for nearly $19 billion.
Shares of Domino's Pizza (DPZ) dipped after the pizza delivery chain said fourth-quarter net income fell 23%.
Elsewhere, Broadcom (BRCM) was down slightly and Qualcomm (QCOM) was higher amid news the chipmakers announced an agreement to dismiss a set of patent claims.
Yum! Brands (YUM) was lower amid reports of rats in one of the fast-food chain operator's franchised locations.
No major economic releases were slated for Friday. Dallas Federal Reserve President Richard Fisher said he hopes the U.S. economy is "turning the corner on inflation." San Francisco Fed President Janet Yellen said she looks for a soft landing.
The docket picks up next week with data releases on personal income and spending, housing sales, fourth-quarter economic growth, and manufacturing activity.
European markets finished slightly higher. The FTSE-100 index in London rose 20.6 points, or 0.32%, to 6,401.5. Germany's DAX index added 18.85 points, or 0.27%, to 6,992.58. In Paris, the CAC 40 index was up 8.52 points, or 0.15%, to 5,716.38.
Asian markets ended mixed. In Japan, the Nikkei 225 index gained 79.638 points, or 0.44%, to 18,188.42. In Hong Kong, the Hang Seng index shed 97.58 points, or 0.47%, to 20,711.65. Korea's Kospi index advanced 4.47 points, or 0.31%, to 1,469.88.
Treasury yields pared their recent gains Friday amid short-covering. The 10-year note climbed in price to 99-19/32 for a yield of 4.68%. The 30-year bond jumped to 99-15/32 for a yield of 4.68%.