NEW YORK — U.S. stocks on Friday closed with weekly gains despite extending losses into a second day, dragged down by declines in both U.S. consumer confidence as well as factory activity in the New York region, while a lowered forecast from Best Buy Co., the nation’s largest electronics retailer, added to the negative tone.
“There were two ugly numbers reported this morning” said Phil Orlando, equity market strategist at Federated Investors.
The New York Federal Reserve’s Empire manufacturing number “fell off a cliff and is reminiscent of the Philly Fed number we saw a few weeks ago, meaning two of the regional manufacturing numbers were just dreadful,” Orlando said.
And, “the Michigan confidence number was well below what was expected and what the January reading was,” said Orlando, who chalked up the move lower to “those two bad numbers on top of a generally sloppy tone of the market.”
Down nearly 100 points during the session, the Dow Jones industrial average fell 28.77 points, or 0.2 percent, to end at 12,348.21, giving the blue chips a weekly climb of 1.4 percent.
Of the Dow’s 30 components, 18 posted losses, with the decline fronted by Honeywell International Inc., off 2.6 percent.
Lower until the final moments of trade, the S&P 500 reversed course to gain 1.13 points, or nearly 1 percent, to 1,349.99, giving it a weekly rise of 1.4 percent, while the Nasdaq composite declined 10.74 points, or 0.5 percent, to 2,321.80, leaving the technology-laden index with a gain of 0.7 percent from a week ago.
Underlying the market’s negative tone, Best Buy lowered its 2008 forecast, with the Minneapolis-based electronics retailer citing soft customer traffic in January. The company’s stock was recently off 2.5 percent.
Best Buy’s profit warning pressured retail stocks, with the S&P Retail Index down 0.6 percent at the close.
“They rally we saw in financials and consumer discretionary was more short covering than anything else; those sectors have not yet found a bottom,” Orlando said.
That said, absent those two sectors, other market categories are in “pretty good shape,” Orlando said. “On balance, earnings are down about 20 percent for the fourth quarter, yet, when you strip out financial services writeoffs and consumer discretionary writeoffs, earnings are positive 10 percent to 15 percent.”
In commodities trading, gold futures ended lower, while platinum futures extended their record-breaking run. Crude-oil futures advanced 4 cents to settle at $95.50 a barrel.
Volume on the New York Stock Exchange approached 1.5 billion, with decliners outrunning advancers about 9 to 7.
The Federal Reserve of New York’s Empire State Manufacturing Survey pointed to declining conditions this month, with the gauge falling nearly 21 points to stand at a negative 11.7, its first drop into the red since May 2005 and far worse than the fall that analysts predicted.
