The Dow and S&P 500 slipped Friday and closed lower for the second week in a row, while the Nasdaq ended higher on the day and week.
The Dow fell 34.01 points, or 0.4%, to 8,438.3, leaving it down 1.2% for the week.
The S&P 500 fell 1.38 points, or 0.2%, to 918.88, off 0.3% over the week, while the Nasdaq Composite Index gained 8.68 points or 0.5%, to 1,838.2, leaving the main tech index with a rise of 0.6% for the week.
The S&P 500 Index is up about 15% since the end of the first quarter, heading towards the end of the quarter and first half of calendar 2009 tomorrow night.
Friday’s trading in the US was relatively quiet for most of the day after a week that included Federal Reserve Chairman Ben Bernanke’s’ contentious appearance on Capitol Hill, the sale of a record $104 billion in U.S. Treasury debt, updates on the global and major economies from the World Bank, OECD and IMF, and more mixed reports on the economy’s health.
Friday also saw another set of reports that have helped investors wonder if the market has run ahead of any recovery.
Friday’s news saw a government report showed personal income surged, but so did savings, as investors opted to sit out the recession rather than spend.
With consumer spending fueling two-thirds of economic growth, the steadily rising savings rate has been a cause of concern for economists.
Boosting personal income was the impact of the Government’s stimulus spending: it happened a year ago with the tax rebates from the former Bush administration.
May personal income rose 1.4%, the Commerce Department reported, much stronger than expected. It was up a revised 0.7% in April.
The rise personal spending was more modest, up just 0.3% in May, in line with forecasts, after falling 0.1% in April.
Personal saving as a percentage of income rose to 6.9% in May from 5.6% in April. The rate was the highest level in more than 15 years.
A separate report from the University of Michigan showed consumer sentiment stronger than expected as it rose to 70.8 in June from an earlier reading of 68.7. Economists thought it would increase to 69.
With a record $US104 billion in bonds sold in last week’s refinancing, the US bond market saw a rally, with the 10 year yield finishing down at 3.51%
Asian share markets ended higher and European markets ended mixed.
European shares fell and pushed the Dow Jones Stoxx 600 Index’s to a second straight weekly decline.
Swiss bank, UBS AG forecast a second-quarter loss, raised 2 billion euros of new capital and saw its shares sink 5.4% on Friday as a result..
The Stoxx 600 slipped 0.1% to 204.47 and lost 1.8% over the week.
London’s FTSE 100 fell on Friday to be down 2.5% over the week, for its first back-to back weekly declines since March 6.
The Footsie has now lost 6% since the start of June
The MSCI Asia Pacific Index rose 2.2% last week to make up some of the 3.5% drop the previous week.
Tokyo’s Nikkei rose 0.9% and Hong Kong’s Hang Seng Index added 3.8%.
In Australia, the ASX200 index was up 1.2%, or 47.8 points, at 3903.8 on Friday, while the All Ordinaries index was also up 1.25%.
Both indexes ended the week virtually flat.
It was quiet in commodity markets. Grains were mostly softer, gold mixed and oil prices fell on Friday as traders took profits.
Weak US consumer spending and new unrest in oil-producing Nigeria influenced sentiment and oil prices fell $US1.07 a barrel to close at $US69.16 for the current August contract on Nymex in New York.
It had risen $US1.56 on Thursday.
In London, Brent North Sea crude for August eased 86 cents to $US68.92.
The Commerce Department reported US consumer spending rose a tepid 0.3 per cent in May from April, mainly as a result of the massive government stimulus launched by President Barack Obama.
The data showed the personal savings rate shot up to a 16-year high, indicating consumers were wary of spending amid rising unemployment and plummeting home values.
That impacted all markets.
Traders kept an eye on rebel violence in Nigeria that has crippled oil supplies.
Prices rose after Nigeria’s main rebel group said it had launched a fresh attack against an oil installation in the south of the country, but there was no strength in the rally.
Gold futures ended slightly higher on Friday, losing some of their initial upward momentum.
The price moved in a broad range between $US920 and $US940 last week on fears about the combination of the US dollar’s swings and easing inflation would boost, then dampen demand for the metal.
Analysts said that the recent encouraging U.S. data had hampered gold’s rise, as the danger of fresh crises in financial markets appeared less imminent.
August futures settled up $US1.50 at $US941 an ounce on COMEX in New York.
Inflows into gold-backed exchange-traded funds waned, reflecting weak fundamental demand for gold from retail investors and the jewelry market.
Holdings at the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.5% to 1,125.74 tonnes as of June 25, down 5.5 tonnes from the previous business day.
