U.S. stocks were mostly flat on Friday as rising oil prices lifted energy stocks and investors digested a mixed bag of data, including regional business activity and consumer sentiment.
Investors have been concerned this week that a steady rise in the price of oil as well, as creeping interest rates in the bond market, could eventually put pressure on the consumer and slow down a much hoped-for economic recovery.
The weak dollar also helped boost companies with international operations, expected to benefit when they repatriate foreign earnings, as well as companies with exposure to commodities. Coca Cola Co
U.S. gold futures touched $980 an ounce on Friday to a fresh three-month high, while benchmark 10-year Treasury notes were on pace for their worst two-month sell-off since 2003 despite recovering slightly on Friday.
We need to absolutely watch this because we start to put additional pressure on the consumer by virtue of higher gasoline prices and higher borrowing costs, said Craig Peckham, equity trading strategist at Jefferies & Co in New York. I think it threatens at least the timing of the recovery.
The Dow Jones industrial average <.DJI> lost 11.15 points, or 0.13 percent, at 8,392.65. The Standard & Poor's 500 Index <.SPX> rose 0.76 points, or 0.08 percent, at 907.59. The Nasdaq Composite Index <.IXIC> fell 4.11 points, or 0.23 percent, at 1,747.68.
On the economic front, data from the Institute of Supply Management-Chicago showed that business activity in the U.S. Midwest contracted at a much more severe rate than expected in May.
Further muddling the picture was the Reuters/University of Michigan Surveys of Consumers, which showed consumer confidence in May improved to its highest level since last September, boosted by hopes the government's economic stimulus plan will help lift the economy out of the recession.
Before the market open, a Commerce Department report showed that the U.S. economy contracted in the first quarter at 5.7 percent annual rate, slightly less than initially estimated by the government earlier in the quarter, while corporate profits rebounded.
Wall Street estimates, however, were for a 5.5 percent contraction.
Shares of General Motors plunged more than 20 percent to $0.89 as GM hurtles toward a government-imposed Monday deadline to achieve sweeping restructuring or face bankruptcy.
Analysts have been concerned about the far-reaching implications a GM bankruptcy could have on the auto industry and the global economy.
Since hitting a 12-year low in early March, the Dow has gained more than 28 percent and the S&P 500 has risen 34 percent.
(Editing by Padraic Cassidy)