A late rally stalled just short of lifting blue chips to their first gain in three sessions but still managed to pare losses for the broader stock indices on Friday. Prospects that the Federal Reserve could soon begin to taper its stimulus programs continued to weigh on market attitudes, carrying all of the major averages to their first weekly losses since mid-April, although new data showing a larger-than-expected rise in durable goods orders helped spark the slow turnaround for equities. Utility stocks posted the steepest declines among the 10 industry sectors in the S&P 500 with shares of energy and material companies also lower following losses for their underlying commodities.
New orders for durable goods rose 3.3% in April, the Commerce Department said this morning, suggesting the recent slowdown for the nation's manufacturing sector could soon be reversing course. Economists polled by Reuters were expecting just a 1.5% advance for last month. The Commerce Department also revised its prior readings for orders to show a smaller decline in March than previously estimated.
Still, traders appear unable to shake worries the Federal Reserve could soon begin tapering its program of $85 bln in monthly bond purchase and other stimulus policies intended to boost economic activity. While improving data points would normally lift stocks, investors also fear the reduced liquidity in the future as the central bank pares its quantative easing will crimp the supply of money available for stocks and other investments.
Among S&P sectors, shares of consumer staples companies were the lone gainers, helped by a 4% rise for Procter & Gamble Co. (PG) after the consumer products giant said Thursday night it was replacing CEO Bob McDonald with his predecessor, A.G. Lafley. PG gave no specific reason for McDonald's departure other than to say that he is retiring. McDonald is 59 and Lafley is 65.
But consumer discretionary stocks struggled, brought down by another string of disappointing earnings results from several retailers.
Commodities settled mostly lower. Crude oil for July delivery slipped 10 cents to end at $94.15 per barrel while June natural gas lost 2 cents to settle at $4.24 per 1 mln BTU. June gold fell $5.20 to $1,386.60 per ounce while July silver was down just a penny to $22.50 per ounce. July copper also fell 1 cent to finish the week at $3.30 per pound.
Here's Where The U.S. Markets Stood At Day's End
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