Written by Reuters
Saturday, 25 July 2009 07:18
NEW YORK: The Nasdaq fell on Friday, July 24 halting a 12-day run-up, following Microsoft Corp's disappointing quarterly results, but gains in pharmaceutical and energy shares lifted the Dow and the S&P 500 to fresh 8-month closing highs, according to Reuters.
Microsoft shares slid 8.3 percent to US$23.45, a day after the software maker posted quarterly revenue below Wall Street's estimates. Web retailer Amazon.com Inc also missed sales expectations, driving its stock down 7.9 percent to US$86.49.
The results cast a cloud over what is so far shaping up to be a stronger-than-expected second-quarter earnings season.
Even so, investors took Wall Street's initial drop on Friday as an opportunity to scoop up shares in other sectors, including energy and defensive plays such as big pharmaceuticals and utilities.
"Microsoft is going through a product transition and no great visibility on the Windows franchise, but in general, the tone this quarter for a good many companies has been strong," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Wealth Management in New York.
"We are not probably going to see a major shift here in the negative direction, so it's probably going to be overall positive for earnings season."
The Dow Jones industrial average rose 23.95 points, or 0.26 percent, to 9,093.24. The Standard & Poor's 500 Index advanced 2.97 points, or 0.30 percent, to 979.26. But the Nasdaq Composite Index shed 7.64 points, or 0.39 percent, to 1,965.96.
Microsoft was the top drag on both the Dow and the Nasdaq. Amazon.com was the Nasdaq's second-worst performer.
The Nasdaq's 12-day winning streak was its longest unbroken run since 1992.
All three major U.S. stock indexes scored a second straight weekly advance, with the Dow rising 4 percent, the S&P 500 gaining 4.1 percent and the Nasdaq climbing 4.2 percent.
For the day, both the Dow and the S&P 500 hit their highest closes since early November 2008.
Since hitting a 12-year closing low of 676.53 on March 9, the S&P 500 has gained 44.7 percent. The Nasdaq, which closed at 1,268.64 on March 9, was up almost 55 percent from that level at Friday's close. The Dow has risen about 39 percent from its March 9 close at 6,547.05.
For the year, the Dow is up 3.6 percent, while the S&P 500 is up 8.4 percent and the Nasdaq is up 24.7 percent.
With 184 of the S&P 500 companies having reported second-quarter results through Friday, 77 percent -- or 142 companies -- have beaten forecasts, according to Thomson Reuters data. - Reuters