News & Observer | newsobserver.com | Stocks mixed after tech news

Published: Jul 19, 2008 12:30 AM
Modified: Jul 19, 2008 01:42 AM

Stocks mixed after tech news

But Citigroup's lower-than-expected loss helps ease investors' concerns

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NEW YORK - Wall Street closed out an impressive week with a mixed performance Friday after disappointing high-tech earnings punctured some of investors' enthusiasm over better-than-expected bank earnings reports. But the major indexes still ended the week with big gains, the result of rising optimism about the troubled financial sector.

The market was clearly pleased when Citigroup, while reporting a second-quarter loss Friday morning, beat analysts' forecasts and joined Wells Fargo and JPMorgan Chase in delivering stronger results than anticipated.

But investors who ecstatically sent the Dow Jones industrials soaring by more than 480 points Wednesday and Thursday were brought back down to earth by results from Google, Microsoft and Advanced Micro Devices.

Google's results were lower than expected, the result of the weakening economy hurting advertising revenue, while Microsoft missed forecasts by a penny. Also, AMD's chief executive stepped down after the chip maker posted a wider-than-expected loss.

Still, the market that has hungered for good news about financial companies after a year-long credit crisis got it from Citi. The banking company reported a $2.5 billion second-quarter loss because of write-downs tied to deteriorating credit markets. The loss was smaller than expected and helped to mitigate some of the market's concerns following a big loss from Merrill Lynch reported late Thursday.

It was a good sign to some analysts that the market didn't sell off sharply after two straight days of hefty gains.

"Not a lot changed in the fundamentals, but you had the financial crisis come to a head," said Philip Dow, managing director of equity strategy at RBC Dain Rauscher. "This was a pivotal week that we just went through, one that perhaps marked a bottom for the financial crisis. That doesn't mean we're about to have a bull market, but maybe a break in the pronounced selling that's been going on."

The Dow rose 49.91, or 0.44 percent, to 11,496.57. Broader stock indicators were mixed. The Standard & Poor's 500 index rose 0.36, or 0.03 percent, to 1,260.68, and the technology-focused Nasdaq composite index dropped 29.52, or 1.28 percent, to 2,282.78.

For the week, the Dow rose 3.57 percent, the Nasdaq increased 1.95 percent, and the S&P rose 1.71 percent.

The dollar was mixed against other major currencies, while gold prices fell.

Overseas, Japan's Nikkei stock average fell 0.65 percent. Britain's FTSE 100 rose 1.70 percent, Germany's DAX index added 1.78 percent, and France's CAC-40 rose 1.74 percent.

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