A larger-than-expected drop in housing starts gave Wall Street a mixed performance Friday, but the Dow Jones industrials had their third straight record close after spending much of the session in a decline.
NEW YORK (AP) — A larger-than-expected drop in housing starts gave Wall Street a mixed performance Friday, but the Dow Jones industrials had their third straight record close after spending much of the session in a decline that lacked conviction. The major indexes had their best week since mid-November.
Investors remained somewhat cautious after the Commerce Department said of construction of new homes and apartments sank 14.3 percent in January, the biggest drop in nearly 10 years. But there was upbeat economic news as well; wholesale prices fell in January by the largest amount in three months amid retreating energy prices.
Technology stocks were weaker after Microsoft Chief Executive Steve Ballmer said late Thursday that Wall Street’s revenue forecasts for the Vista operating system were “overly aggressive.” The stock, trading just off its 52-week high, fell more than 2 percent.
Friday’s advance gave the Dow its fourth straight gain. The market’s February rally has been driven by growing confidence that interest rates will hold steady as Federal Reserve Chairman Ben Bernanke battles inflation and tries to ease the economy into a soft landing.
“The Microsoft news and the housing data spooked the market,” said Jim Herrick, director of equity trading at Baird & Co. “But, this is just a mild drop, not a dramatic sell-off, and I wouldn’t be surprised if we see some type of rally toward the afternoon.”
According to preliminary calculations, the Dow rose 2.56, or 0.02 percent, to 12,767.57. It marked the Dow’s 30th record close since the start of October and the blue chips’ third record close of the week.
Broader stock indicators moved lower. The Standard & Poor’s 500 index fell 1.27, or 0.09 percent, to 1,455.54, and the Nasdaq composite index dropped 0.79, or 0.03 percent, to 2,496.31.