FOX Business: The Power to Prosper
The markets were modestly lower as traders weighed better-than-expected consumer sentiment data against continued uncertainty over the euro zone's plans to tackle its debt crisis.
As of 3:06 p.m. ET, the Dow Jones Industrial Average rose 18.6 points, or 0.15%, to 12,227, the S&P 500 slipped 0.12 point, or 0.01%, to 1,284 and the Nasdaq Composite fell 1.9 points, or 0.07%, to 2,736.
Traders took a breather on Friday following a very strong showing in the prior session. Volume on the New York Stock Exchange is running close to 30% lower than in the first part of the trading day on Thursday.
Consumer discretionary shares took the biggest losses by a wide margin after Whirlpool (NYSE:WHR), the biggest appliance manufacturer, pared back its full-year profit estimates and announced job cuts. Meanwhile, miners performed the strongest.
Despite falling share prices Friday, the markets are headed for their best October performance on record, as easing European tensions, and generally upbeat corporate earnings have boosted traders' confidence. Indeed, Thursday's rally knocked most major market indices into the black for 2011. The Dow, S&P, and Nasdaq are all trading at their highest level in three months.
All eyes are still fixed on Europe, however, even after policymakers Thursday crafted a plan to tackle the region's debt crisis that has threatened some of the world's biggest economies. Doubts still remain among analysts as to whether the euro zone's $610 billion rescue fund, even after substantial leveraging, will be enough to tackle future sovereign debt crises, particularly if they strike big economic players, like Italy.
The currency bloc is hoping China may make an investment in the fund, taking advantage of its strong position in currency markets. However, European and Chinese leaders downplayed that notion on Friday, according to several media reports from Asia and Europe.
Additionally, Spiegel, a major German newspaper, reported that German courts filed a temporary injunction limiting the country's parliament from quickly releasing funds for the rescue fund, potentially presenting another setback.
The euro fell 0.06% to $1.417 while European blue chips edged slightly lower.
Traders also have a slew of corporate and economic news on the domestic front to parse through.
Consumer sentiment ticked higher in late October, according to a private survey. The final reading of the Reuters/University of Michigan gauge of consumer sentiment checked in at 60.9, higher than a preliminary reading of 57.5, and topping estimates of 58. Additionally, the expectations and current conditions sub-indices rose to the highest level since July.
U.S. personal spending rose 0.6% in September from August, in line with estimates, while personal income rose 0.1%, short of estimates of 0.3%.
Analysts will be paying close attention to the state of consumers as the key holiday shopping season draws near. Retailers, such as Best Buy (NYSE:BBY), may be particularly swayed by these reports. These data come on the heels of a report showing the economy grew at the fastest pace in a year in the third quarter of 2011.
Pharmaceutical giant Merck (NYSE:MRK) posted third-quarter profits of 94 cents a share, excluding one-time charges, on revenue of $12 billion, topping estimates on the top and bottom line. Whirlpool said it plans on slicing more than 5,000 jobs, which equates to roughly 10% of its workforce, as it has seen its sales grow more slowly than expected. The world's largest appliance maker also trimmed its full-year earnings forecast.
Also on the corporate front, Rochdale Securities' Dick Bove, an influential banking analyst, raised his rating on Goldman Sachs (NYSE:GS) from neutral to buy, and bumped up the price target to $135 from $115.
Energy futures were in the red following strong gains in the prior session. Light, sweet crude fell 89 cents, or 0.96%, to $93.07 a barrel. Wholesale RBOB gasoline slipped 4 cents, or 1.3%, to $2.71 a gallon.
In metals, gold fell $2.00, or 0.11%, to $1,746 a troy ounce. Yields on government debt moved lower. The benchmark 10-year note yielded 2.382% from 2.402%.
Hewlett-Packard (NYSE:HPQ) revealed plans to keep its personal computer business after announcing in August that it would spin the business off in a move that was panned by shareholders.
Chevron's (NYSE:CVX) quarterly profits topped Wall Street's expectations, however, the oil behemoth's sales fell well short of forecasts.
European blue chips fell 0.18%, the English FTSE 100 dipped 0.2% to 5,702 and the German DAX fell 0.2% to 6,346.
In Asia, the Japanese Nikkei 225 jumped 1.4% to 9,050 and the Chinese Hang Seng soared 1.7% to 20,019.