Shares Turn Up on Wall Street

Stock indexes opened lower but then turned positive on Wall Street on Friday, as traders saw more good than bad in a string of new economic reports.

The Standard Poor’s 500-stock index was up 0.1 percent in afternoon trading and the Dow Jones industrial average rose 0.2 percent. The Nasdaq composite index was up 0.1 percent. European stocks ended moderately lower, while Asian stocks ended mixed.

Investors were looking ahead to budget cuts in Washington that were widely expected to take effect at the end of the day, barring an unlikely last-minute deal. The International Monetary Fund has said that if the cuts take effect, it would re-evaluate growth forecasts for the United States and the global economy.

Data showed that January personal income fell 3.6 percent, its biggest drop in 20 years, while consumer spending rose slightly. Other reports showed improvements in consumer sentiment and manufacturing activity.

Overseas, China’s factory growth cooled to multimonth lows in February as domestic demand dipped, and euro zone manufacturing activity appeared no closer to recovery last month, as a dire performance in France offset a return to growth in Germany.

“The weakness overseas really spooked things, and that’s what’s directing the ball right now,” said Bill Stone, chief investment strategist at PNC Wealth Management in Philadelphia. “There are also jitters, with the Dow at the doorstep of all-time highs. Given the speed of the advance we’ve seen, there’s plenty of room for a pullback.”

Equities have been on a tear lately, rising for four straight months to approach five-year highs, while the Dow was now about 1 percent away from its all-time intraday high of 14,198.10 points. Any declines have been shallow or short-lived, with investors jumping back in to seek value.

The gains have come on the back of strong corporate earnings and an accommodative Federal Reserve. In that environment, many investors have shrugged off the potential impact of $85 billion in spending cuts across federal agencies that economists expect will shave half a percentage point off economic growth in the United States.

For the week, the Dow was up 0.4 percent at the start of Friday, while both the S.P. 500 and Nasdaq were down less than 0.1 percent. Both the Dow and S.P. climbed more than 1 percent in February, slimmer gains than in January as equities grappled with uncertainties in Europe and Federal Reserve policy.

Groupon gained 2 percent a day after the online coupon company fired its chief executive officer in the wake of weak quarterly results.

Gap Inc. rose 3.9 percent at the opening bell, but then sagged to just a 0.1 percent gain after reporting fourth-quarter earnings that beat expectations andraising its dividend by 20 percent. Salesforce.com posted sales that beat forecasts, sending shares up 1.9 percent.

Stocks ended flat on Thursday, giving up modest gains late in the session.

Article source: http://www.nytimes.com/2013/03/02/business/daily-stock-market-activity.html?partner=rss&emc=rss