But a mixed day as profit taking obliterates strong morning rally after Oracle bid, jobs report.
June 6, 2003: 4:08 PM EDT
By Meghan Collins, CNN/Money Staff Writer
NEW YORK (CNN/Money) - U.S. stocks ended mixed Friday, but up for the week, as investors couldn't fight off urges to take profits after an early rally on a better-than-expected jobs report and a takeover bid by business software maker Oracle.
According to preliminary results, the Nasdaq composite (down 18.59 to 1627.42, Charts) slipped more than 1 percent. The Dow Jones industrial average (up 21.49 to 9062.79, Charts) managed small gains, while the S&P 500 index (down 2.38 to 987.76, Charts) ended lower.
All three indexes had rallied strongly in the morning on news that the number of jobs lost in May was a great deal lower than economists had expected, and on a surprise bid by Oracle to buy PeopleSoft. But they pulled back in afternoon trading as some investors couldn't resist the temptation to take profits after the surge and ahead of the weekend.
Although session ended mixed, all three indexes ended their second straight week significantly higher, however. The major markets have all been up in five out of the past six weeks.
Despite mixed economic reports and few signs of growth in the economy, investors have jumped back into stocks in recent months, driven by hopes of better times in the second half of the year. The resurgence has helped the Dow reach its highest point in more than nine months, and the Nasdaq to hit levels not seen for more than a year. The S&P has also jumped to its top height since July 2002.
Here's a look at market action throughout the session.
PeopleSoft rallies on Oracle bid
Early Friday morning Oracle (ORCL: down $0.27 to $13.09, Research, Estimates), the world's leading business software maker, said it had made an offer to buy smaller rival PeopleSoft (PSFT: up $2.71 to $17.82, Research, Estimates) for $5.1 billion in cash, or about $16 a share. The news sent PeopleSoft's stock soaring more than 17 percent.
Earlier this week, PeopleSoft said it was about to buy J.D. Edwards (JDEC: up $0.41 to $13.20, Research, Estimates), another, smaller maker of business software, in a stock deal worth about $1.7 billion. But the Oracle offer could derail this deal, as Oracle itself said that if its bid for PeopleSoft is successful, it would reexamine the J.D. Edwards acquisition. Shares of J.D. Edwards still rallied more than 3 percent.
News of the Oracle offer, especially on the heels of the J.D. Edwards deal Monday, sent bullish signals through the entire business software sector and the broader technology sector as well. Signs of a recovery in merger and acquisition activity in technology could be perceived as yet another signal that an overall business recovery might happen in the second half.
Reinforcing such thinking, Oracle also said Friday that it would report earnings per share of 14 or 15 cents in its fiscal fourth quarter, which ended last month. That is at or slightly above the 14 cents a share consensus forecast of analysts surveyed by earnings tracker First Call. The company also earned 14 cents a share a year earlier.
The announcement came on the heels of what was seen as a generally positive mid-quarter update by Intel (INTC: down $0.08 to $21.76, Research, Estimates) late Thursday. In it, the world's biggest chipmaker narrowed its sales forecast range for the second quarter but held the mid-point of the range steady, and that seemed to satisfy investors looking for reasons to buy the stock.
Jobs report aids rally
The eagerly awaited May jobs report showed few surprises and mostly positive ones. The unemployment rate rose to 6.1 percent last month, as had been expected, but the economy lost only 17,000 jobs, where a loss of 39,000 had been forecast. This led Wall Streeters to believe that, perhaps, the labor market might be on its way to recovery, too -- first the number of job cuts would shrink, then, hopefully, employers might do some real hiring.
The breadth of the market was negative on strong volume. Losing stocks edged past winners on the Nasdaq, where 2.9 billion shares traded. On the New York Stock Exchange, advancing stocks tied decliners, as 1.8 billion shares changed hands.
Bonds turned mostly higher. The 10-year note rose 1/32 of a point in price, pushing its yield down to 3.34 percent. The dollar was higher against the yen and the euro.
Among key commodities, gold tumbled $5 to $364.50 an ounce in New York and light crude oil rose 54 cents to $31.28 a barrel in New York.
Stock markets in Europe closed with gains. Most markets in Asia also ended higher overnight.
--*Disclaimer
Cumprimentos e bom fim de semana para todos.
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