Wall Street cuts losses on late buying
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Wall Street cuts losses on late buying

Last Updated: Saturday, January 28, 2012, 09:14
 
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Wall Street cuts losses on late buying
New York: US Stocks trimmed losses to end little changed on Friday, as investors saw dips in the market as an opportunity to buy into what has been a strong first month of 2012.

The Dow posted its first weekly loss this year, hurt Friday as Chevron Corp announced earnings that were below Wall Street's estimates and Procter & Gamble Co cut its full-year profit forecast because of the strong dollar.

But the emergence of late-day buyers was viewed positively as major averages have methodically climbed through January. This week's news that the Federal Reserve intends to keep interest rates low through late 2014 added a jolt of demand that could extend the rally.

"Investors are almost welcoming these little dips, jumping in when they can to join this rally. At this point, they are rationalizing anything they can to get in," said James Dailey at TEAM Financial Management LLC in Harrisburg, Pennsylvania.

"Cautious bulls are no longer cautious after the Fed announcement this week."

Chevron, the No. 2 US oil company, fell 2.5 percent to USD 103.96 and was the biggest drag on the Dow.

The Commerce Department said US gross domestic product expanded at its fastest pace in 1-1/2 years in the last quarter of 2011, but the 2.8 percent rise fell short of expectations.

Inventory building accounted for much of the growth, and weak spending by businesses in the GDP report pointed to a slower pace of recovery early this year, denting recent optimism about the economy.

In company news, Facebook plans to file documents as early as Wednesday for a highly anticipated initial public offering that will value the world's largest social network at between USD 75 billion and USD 100 billion, according to the Wall Street Journal, which cited unidentified sources.

The Dow Jones industrial average was down 74.17 points, or 0.58 percent, at 12,660.46. The Standard & Poor's 500 Index was down 2.11 points, or 0.16 percent, at 1,316.32. The Nasdaq Composite Index was up 11.27 points, or 0.40 percent, at 2,816.55.

For the week, the Dow fell 0.5 percent, the S&P was up 0.1 percent and the Nasdaq rose 1.1 percent.

Friday's losses were limited as US Federal Reserve statements this week and economic data kept investors alert for the possibility of another round of monetary stimulus known as quantitative easing, or QE3.

"Out of what the Fed said, you can expect some negative numbers because the Fed obviously saw what the GDP numbers are and they anticipate a slowdown," said Sean Kraus, chief investment officer at CitizensTrust in Pasadena, California.

If the Fed does resort to QE3 to stimulate growth, investors "don't want to be caught flat-footed and be out of risky assets," Kraus said.

Consumer product company Procter & Gamble dipped 0.8 percent to USD 64.30.

Ford Motor Co shares fell 4.2 percent to USD 12.21 after the carmaker reported a lower-than-expected fourth-quarter profit on higher commodity costs and losses in Europe and Asia.

Network equipment makers Juniper Networks Inc and Riverbed Technologies Inc gave first-quarter outlooks after the close Thursday that were below expectations. Juniper fell 3 percent to USD 21.69 while Riverbed slid 18.3 percent to USD 24.45.

Utilities were the worst performing among S&P sectors after results from American Electric Power Co Inc and Dominion Resources. American Electric was off 3.2 percent to USD 39.95, while Dominion fell 2.5 percent to USD 49.56. The S&P utilities index fell 1.3 percent.

Eastman Chemical Co offered to buy specialty chemical maker Solutia Inc for about USD 3.38 billion in cash and stock to extend its reach in emerging markets, particularly the Asia-Pacific region. Solutia shares jumped about 41.1 percent to USD 27.52 and Eastman shares gained 7 percent to USD 50.41.

Negotiations between Greece and its private creditors on a debt swap deal made progress on Friday and will continue over the weekend, a senior Greek government official said. Renewed concern about the crisis has troubled markets this week.

About 6.6 billion shares exchanged hands on the New York Stock Exchange, NYSE Amex and Nasdaq on Tuesday.

Bureau Report




First Published: Saturday, January 28, 2012, 09:14


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