By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks fluctuated between mild
gains and losses on Friday, with investors pausing after two
bruising days that left Wall Street on track for a second weekly
drop.
"Even after a pullback from the last couple of days, we're still
up (nearly 17%) year to date, and just like 2012, it coincides with
a weak-growing economy. Two percent economic growth gave us 16%
equity appreciation last year," said Jerry Villella, a J.P. Morgan
Private Bank investment specialist based in Dallas.
"Earnings-per-share growth is what counts," said Villella,
adding that 3% of that growth is coming from top-line, or sales
growth, none stems from margin expansion and 1% comes from a
shrinkage in outstanding shares due to corporate share
repurchases.
After the worst two days since June, with the most recent
cutting 338.82 points, or 2.2%, off the Dow Jones Industrial
Average (DJI), benchmark indexes on Friday were little changed.
"It's not surprising to see volumes dry up in late August and
moves to be magnified in one direction or another," said
Villella.
Trading in a 62-point range, the Dow Jones Industrial Average
was lately up 10.95 points, or 0.1%, at 15,123.14, a level that has
it down 2% for the week.
Technology and financials led sector gains and utilities and
telecommunications paced losses on the S&P 500 index (SPX),
which held a fractional gain at 1,661.60, off 1.8% from last
Friday's close.
Down 1.2% this week, the Nasdaq Composite (RIXF) rose 10.64
points, or 0.3%, to 3,616.76.
Decliners outpaced advancers on the New York Stock Exchange,
where 274 million shares traded by 11:10 a.m. Eastern. Composite
volume topped 1 billion.
The Commerce Department reported housing starts climbed at an
annual rate of 896,000, less than the 915,000 estimated.
"They were a bit weaker than expected, but I still think it's
overall good news, as they approached 900,000. I was disappointed
about single-family starts, which actually declined, and it is a
bit surprising. Based on recent permit data, I was hoping to see
more of an uptick on the single-family side," said Elizabeth
Ptacek, a senior credit real-estate analyst at KeyBank.
But Ptacek believes that difficulty in getting financing is more
of an issue for housing than higher interest rates: "Credit remains
very tight. It's easing, but not quickly enough for first-time home
buyers."
The Labor Department reported productivity rose at a slightly
better-than-estimated 0.9% annual rate in the second quarter. The
initial read of the University of Michigan/Thomson Reuters consumer
sentiment fell to 80.0 this month, down from 85.1 in July,
according to published reports.
The 10-year Treasury yield (10_YEAR) rose 2 basis points at
2.794%.
Gold prices rose $5.80, or 0.4%, to $1,366.70 an ounce,
extending a two-day rally in which it gained $40.40, or 3.1%. Up
for six of its last five sessions, the metal is up 4.1% for the
month and down 19% for the year. Oil prices gained and the dollar
edged higher against the currencies of major U.S. trading
partners.
Nordstrom Inc. (JWN) shares fell 3.5% a day after the high-end
retailer reported lower-than-expected sales and cut its full-year
forecast.
Aspen Technology Inc. (AZPN) shares jumped 10% after the maker
of software for process manufacturing posted higher-than-expected
sales and earnings for the fiscal fourth quarter.
Dell Inc.(DELL) posted adjusted earnings of 25 cents per share
-- a penny higher than analysts had predicted. Shares of the
personal-computer maker were flat.
Upbeat jobless-claims data on Thursday helped cement the view
that tapering of the Federal Reserve's bond-buying program will
happen in September. U.S. stocks sank for a second day, driven by
tapering fears, downbeat corporate news and a spike in Treasury
yields to 2011 highs.
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