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Stocks rest after rally

26/03/2004 16:48
Major indexes slightly weaker in early trade as market pulls back after Thursday's surge.

U.S. stock markets crept lower early Friday, retreating after Thursday's strong surge.


After 10 minutes of trading, the Dow Jones industrial average (down 21.70 to 10197.12, Charts), the Standard & Poor's 500 (down 1.43 to 1107.76, Charts) index and the Nasdaq composite (down 3.28 to 1963.89, Charts) all trended lower.

The major indexes rallied sharply Thursday, snapping back after a two-week selloff that had taken the major indexes to lows not seen since November/December of last year. But the rally may have been a bout of short-covering after the pullback, rather than the next stage in the bull market, analysts said.

The morning's economic news was mixed, showing that income grew at a faster pace than spending.

Personal income rose 0.4 percent after rising an upwardly revised 0.3 percent in January. Economists expected it to rise 0.3 percent. Spending rose 0.2 percent after rising an upwardly revised 0.5 percent last month. Economists expected it to rise 0.5 percent.

Due after the open, the final March reading on the University of Michigan's consumer sentiment index is forecast to show a slight decline to 94.0 from an initial read of 94.1 and from 94.4 in February.

In corporate news, shares of Dow component General Electric (GE: up $0.45 to $30.15, Research, Estimates) edged up after Merrill Lynch added it to its Focus 1 list.

Treasury prices inched lower, pushing the 10-year note yield up to 3.76 percent from 3.74 percent late Wednesday. The dollar fell versus the yen and euro.

Among commodities markets, Brent crude oil futures added a penny to trade at $31.84 a barrel in London. COMEX gold rallied $6.80 to $423.70 an ounce, a 10-week high.

Asian markets closed mostly higher. European markets were mixed at midday there.