Wall Street report: Friday close
STOCKS rallied as a surprise rise in consumer sentiment and a heartening forecast by telecoms equipment maker
The University of Michigan's key gauge of consumer sentiment rose for the third consecutive month in December, as buyers demonstrated confidence in the economy's prospects, even as personal income declined during October. Consumer spending accounts for nearly two-thirds of US economic activity.
Better-than-expected outlooks from Nortel and Nike also lifted hopes that the economy and corporate profits will turn around next year. Investors are betting the market hit bottom in September and is poised to rise further. 'We're looking forward to a recovery in the first or second quarter of next year, and we need numbers that are going to confirm that idea,' said Peter Gottlieb, portfolio manager at First Albany Asset Management.
Nortel gained 77 cents to $7.13, after it said quarterly losses would be narrower than feared. It dragged many networking stocks up in its wake, like Ciena, which rose 42 cents to $14.43.
Software company Manugistics Group rallied sharply after it posted quarterly earnings that exceeded market expectations. Manugistics surged $3.63 or 23% to $19.47.
Nike, the world's largest maker of athletic shoes and clothing, said it expected modest earnings and revenue growth for the balance of its 2002 fiscal year. It gained $2.51 to $56.30.
An earnings warning from Juniper Networks on Thursday suggested the road to recovery in corporate earnings will not be a smooth one. But its stock recovered some of its losses on Friday, rising $1.16 or 6% to $20.01.
Money managers rebalancing their portfolios before the end of the year directed much of the market's movement, while traders scrambled to square positions ahead of Monday's shortened trading day, analysts said. Weak financials and pharmaceuticals helped constrain wider market gains.
JP Morgan Chase fell 77 cents to $35.75 on continued fallout stemming from its exposure from bankrupt energy trader Enron.
Drugmaker Pfizer fell 40 cents to $41 after a Texas jury awarded plaintiffs $43m (£28m) in compensation from injuries arising from the company's recalled diabetes drug Rezulin. Rival Eli Lily fell $1.63 to $78.40.
