Facebook Twitter



Technology shares sagged on the latest earnings news, but the rest of the stock market advanced broadly Friday as interest rates fell amid fresh signs of a moderating economy.

The Dow Jones industrial average rose 23.67 to 5,689.45, about 10 points shy of its high on the session. For the week, the blue-chip index was up 8.14 points.Most broad measures also rose Friday, but trading was extremely light again, with those investors not away on summer vacations basking in the relative calm compared with the turbulence of July.

"It was a modestly, positive, quiet August Friday," said Russ Labrasca, senior vice president at Principal Financial Securities of Dallas, "People's thoughts are not toward the price of equities, but toward leaving the office and relaxing for the weekend."

Bonds posted strong gains, sending long-term interest rates lower, after the Commerce Department reported that construction of new homes and apartments slowed for a third straight month in July. A separate report Friday indicated that consumer sentiment ebbed in July and was mostly unchanged thus far in August.

The reports were consistent with the latest readings on most other sectors of the economy, furthering expectations the Federal Reserve will not feel compelled to raise its key lending rates next week. An increase in interest rates is a tool the Fed uses to head off inflationary pressures by slowing borrowing and spending.

The data "again gave some comfort to bond traders that the Federal Reserve won't change interest rates at Tuesday's meeting," said Labrasca.

As bond prices improved, the yield on the 30-year Treasury bond fell to 6.76 percent from 6.80 percent late Friday. Inflation lowers the value of fixed-income investments, driving down bond prices to force their yields higher. Rising bond yields - a key influence on borrowing costs - and higher Fed lending rates can hurt stocks by raising corporate operating costs and slowing consumer spending.

Advancing issues outnumbered decliners by a 2-to-1 margin on the New York Stock Exchange, where volume totaled 330.71 million shares as of 4 p.m., the 10th straight tally under 400 million and the seventh consecutive under 350 million.

The NYSE's composite index rose 1.74 to 355.96, the Standard & Poor's 500-stock index rose 2.93 to 665.21, and the American Stock Exchange's market value index rose 3.61 at 556.14.

But the technology-laden Nasdaq composite index fell 1.04 to 1,133.65 on a late round of selling in computer-related issues, which were pressured by a less-than-enthusiastic response to the industry's latest earnings news.

After the close of trading Thursday, Hewlett-Packard reported a 26 percent drop in third-quarter profits and warned that some profitability problems could continue. And networking equipment leader Cisco Systems reported a 78 percent gain in its fiscal-fourth-quarter earnings, exceeding most estimates, but apparently not enough for some tastes.

Cisco shares surrendered early gains and slid 15/8 to 561/8. But Hewlett-Packard shares, which slid 31/2 to 40 on other markets after Thursday's NYSE close, rebounded 17/8 to 417/8.

Improving crude prices helped the Dow, lifting Exxon 15/8 to 823/8, Texaco 13/4 to 88, and Chevron 13/8 to 59. The Dow's strongest issues also included Sears, up 15/8 to 461/4 and Procter & Gamble, up 11/4 to 901/4.

Overseas, Tokyo's Nikkei stock average fell 0.6 percent, Frankfurt's DAX index rose 0.1 percent, and London's FT-SE 100 rose 0.9 percent to a new high.