U.S. Stocks Rise As Amazon.com's Buyback Plan Lifts Nasdaq
NEW YORK (MarketWatch) -- U.S. stocks turned mildly higher Friday, led by the recently beat-up technology sector, which was lifted in part by online retailer Amazon.com Inc.'s buyback plan.
The move higher, however, was restrained by ongoing worries about the U.S. economy.
"Going by market action, we have not fully discounted the strong probability of a recession," said Al Goldman, chief market strategist at A.G. Edwards. .
The Dow Jones Industrial Average was up 11.8 points to 12,258.8, off opening lows that had the blue-chip index sliding more than 70 points.
Of the Dow's 30 components, 12 posted gains, led by McDonald Corp. , up 3.4%, in the wake of January sales results.
Another blue chip, Coca-Cola Co. , climbed 1.9% after its upgrade to outperform from peer perform at Bear Stearns, with the broker citing solid results at PepsiCo and other consumer companies with a global reach.
Other stocks advancing on the blue-chip index included technology shares, with Microsoft Corp. up 3% and Hewlett-Packard Co. up 3.4%.
Broader indexes also pulled higher. The S&P 500 gained 1.45 points to 1,338.36. The technology-laden Nasdaq Composite climbed 21.15 points to 2,314.18, boosted by plans by Amazon.com to buy back as much as $1 billion worth of common stock.
Amazon shares advanced 3.7%.
Volume on the New York Stock Exchange neared 427 million, and advancing stocks topped those declining about 8 to 7. On the Nasdaq, 740 million shares exchanged hands, and advancers outran declining issues, also by roughly 8 to 7.
The dollar was little moved against rivals, and yields on 10-year Treasury notes fell to 3.688%.
"With the economy either in recession or very close to being in one, we favor buying bonds on sell-offs," said Tom DiGaloma, head of Treasury trading at Jefferies & Co.
On the New York Mercantile Exchange, oil futures added $1.84 to trade at $89.95 a barrel, and gold futures climbed $13.5 to stand at $923.5 an ounce.
Fed factors
The Commerce Department reported inventories at U.S. wholesalers climbed 1.1% in December, the largest gain since August 2006. .
Friday was also set to bring more talk from Federal Reserve officials, on the heels of a speech in Hawaii late Thursday by Janet Yellen, president of the Federal Reserve Bank of San Francisco. Yellen, who isn't a voting member of the Federal Open Market Committee, said the U.S. would probably avoid a recession but experience lackluster economic growth in coming months.
Since the middle of September, the Fed has cut its target lending rate to 3% from 5.25%, as signs of economic trouble heightened. The Fed's moves included a large emergency cut of three-quarters of a percentage point in late January.
"The U.S. and global economies are looking decidedly shakier, in terms of both the tone of the high-frequency data flow and the fault lines in financial markets," said Ethan Harris, an economist at Lehman Brothers
Shares of MBIA Inc. were up 2.4% after the world's largest bond insurer -- which is trying to hang on to its AAA rating -- priced $1 billion in common shares to raise capital. .
McAfee rose 9.2% after the software maker's 63% quarterly profit drop proved less steep than anticipated.
Alcatel-Lucent posted higher fourth-quarter revenue than forecast, though the telecom-equipment maker warned of a first-quarter operating loss and halted its dividend. Shares opened lower.
An explosion and a fire at an Imperial Sugar refinery has left dozens of people injured, with six workers still missing, according to news reports.
Overseas, the Nikkei 225 ended 1.4% lower, hurt by disappointing machinery orders data. But European stocks retained gains. .
U.S. stocks had climbed Thursday as bargain hunters returned to the market, hit by three days of losses that left the Nasdaq in bear-market territory.
By Kate Gibson