Dow struggles with weak profits, but Google lifts tech
NEW YORK -- Investors' ambivalence about earnings reports gave Wall Street a mixed performance Friday.
Traders pounced on companies showing signs of life and dumped companies whose quarterly results fell short of expectations. Better-than-forecast results from Google helped technology shares while lackluster numbers from General Electric reinforced investors' concerns about the depths of the recession.
Stocks ended a volatile session well off their lows. A sizable comeback Friday was the latest back-and-forth seen throughout a turbulent week; the Dow tumbled 4% Tuesday, jumped 3% Wednesday and fell again Thursday. Volatility has been more the rule than the exception in recent trading as investors sort through a plethora of wide-ranging earnings reports.
"I think we had a lot of bad news to absorb and stocks did OK," said Thomas J. Lee, equities analyst at JPMorgan, referring to the week's performance.
The Dow industrials fell 45.24, or 0.56%, to close Friday at 8,077.56. The Dow had been down more than 200 points early in the day and briefly moved into positive territory.
Broader stock indicators rose. The Standard & Poor's 500 index rose 4.45, or 0.54%, to 831.95, while the Nasdaq composite index rose 11.80, or 0.81%, to 1,477.29.
For the week, the Dow is down 2.46%, the S&P 500 is down 2.1% and the Nasdaq is ending off 3.4%.
The results from GE weighed on industrial names. The company's results met Wall Street's lowered expectations but investors grew worried that GE will reduce its dividend. They are also nervous the company could lose its coveted "AAA" credit rating because of the recession that has crimped lending at GE Capital and hurt its industrial and entertainment businesses. GE fell 11%.
Insurer Aflac helped ease some of Wall Street's concerns about the financial industry after reassuring investors it had more than enough cash to maintain its credit ratings. The company's stock tumbled 37% Thursday on reports it did not have adequate capital to cover risky investments. The company issued a statement and an analyst released a research note backing the company's financial position. Aflac rose 6.9%.
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