By
Mark Cotton &
Leslie Wines, MarketWatchLast Update: 4:43 PM ET May 12, 2006
NEW YORK (MarketWatch) -- U.S. stocks closed lower on the day and week Friday, with the Nasdaq Composite at its weakest level since mid-February, on concern about rising bond yields and inflation. The Dow Jones Industrial Average (
$INDU : Dow Jones Industrial Average
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moreLast: 11,380.99-119.74-1.04%
4:30pm 05/12/2006
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$INDU11,380.99, -119.74, -1.0% ) closed down 119.74 points, or 1% lower, at 11,380.99. Of the 30 Dow components, 26 traded lower.
Check performance of Dow stocks. The Nasdaq Composite Index (
$COMPQ : Nasdaq Composite Index
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moreLast: 2,243.78-28.92-1.27%
4:54am 05/13/2006
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Get up to 50 free trades at TD AMERITRADE.$COMPQ2,243.78, -28.92, -1.3% ) fell 28.92 points, or 1.27%, to 2,243.78, it weakest close since February 13. The S&P 500 Index (
$SPX : S&P 500 Index
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4:59pm 05/12/2006
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$SPX1,291.24, -14.68, -1.1% ) dropped 14.68 points, or 1.1%, to 1,291.24. For the week, the Dow Jones Industrials lost 0.5%, the Nasdaq caved in 3.4% and the S&P 500 dropped 1.6%. "The market remains on the defensive following the broad-based decline Thursday," said Michael Sheldon, chief market strategist at Spencer Clarke LLC. On Thursday, stocks logged their biggest one-day decline since January, drubbed by worries that rising commodity prices will translate into higher inflation and prompt the Federal Reserve to raise interest rates again in June. Sheldon said that the S&P 500's 50-day moving average at around 1,301 is a key level to watch in the near term, as "the market bottomed slightly below this level in February, March and April earlier this year." Commenting on the latest data, he pointed out that import prices excluding energy were right in line with expectations: "The trade report was impressive, but the deficit will probably head higher over the next few months because of the fact that oil prices rose sharply after March. The other implication of the report is that first-quarter GDP is likely to be revised higher, and that had an impact on the bond market, which led to bond yields rising to new cycle highs." On the broader market for equities, decliners outpaced advancers by 13 to 3 on the New York Stock Exchange and by 22 to 7 on the Nasdaq. In a broad-based pullback, Internet stocks (
$GIN : CBOE Gsti Internet Index
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4:49pm 05/12/2006
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$GIN181.48, -6.68, -3.6% ) , retailers (
$RLX : s&p retail index-rlx
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moreLast: 469.74-8.38-1.75%
4:29pm 05/12/2006
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$RLX469.74, -8.38, -1.8% ) , oil services (
$OSX : phlx euro style oil svc index osx
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moreLast: 221.43-9.35-4.05%
4:03pm 05/12/2006
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$OSX221.43, -9.35, -4.1% ) , home builders (
HGX : phlx hsg sector index
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moreLast: 243.27-3.47-1.41%
4:04pm 05/12/2006
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HGX243.27, -3.47, -1.4% ) and networkers (
$NWX : amex networking index-nwx equal-$ weight
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4:03pm 05/12/2006
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$NWX247.12, -4.34, -1.7% ) were some of the biggest decliners. Volume was about 1.84 billion on the Big Board, and more than 2.31 billion on the Nasdaq. Flurry of dataOn the data front, the nation's trade deficit narrowed 5.6% to $62 billion as the United States exported a record amount of goods to Canada, Mexico, the European Union, China and the South/Central America region in March. Economists surveyed by MarketWatch had expected the deficit to widen to $66.9 billion.
See full story. On a less positive note, U.S. consumer-sentiment plunged in May on rising gasoline prices and a softening labor market, according to media reports of proprietary research. The University of Michigan consumer-sentiment index fell to 79 in May from 87.4 in April, the lowest since October's 74.2.
See full story. Rising energy prices also boosted import prices in April. Prices of goods imported into the United States rose 2.1%, powered by an 11.5% increase in the price of imported petroleum, the Labor Department said. Excluding petroleum, import prices were flat. Excluding all fuels, import prices rose 0.1%, the fifth consecutive increase. Economists surveyed by MarketWatch had been expecting a rise of 1% in the headline figure for April.
See full story. After the trade-deficit data, the U.S. dollar traded mixed, but later turned decisively lower. The euro late in the day was up 0.5% at $1.2920. The greenback fell 0.09% to 110.08 yen, to trade up 0.1% at 110.26.
See Currencies. After a choppy session, gold futures ended lower, but still logged a 4% gain on the week. Gold for June delivery fell $9.70 to $711.80 an ounce, after touching an almost 26-year high of $728 earlier.
See Metals Stocks. In bonds, long-term Treasury prices fell, sending yields higher. The benchmark 10-year note closed down 10/32 at 99 16/32, with its yield (
$TNX : CBOE 10-Year Treasury Yield Index
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moreLast: 51.86+0.31+0.60%
2:59pm 05/12/2006
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Get up to 50 free trades at TD AMERITRADE.$TNX51.86, +0.31, +0.6% ) at 5.189%.
See Bond Report.