RTTNews - US stocks closed Friday's quiet session little changed as traders hesitated to take positions ahead of the long Memorial Day weekend. Bargain hunting drove gains into the late afternoon, but the major averages fell uniformly heading down the home stretch.
The dollar continued to take a brutal beating, as traders continued their exodus from the world's reserve currency amid speculation that the global economy is on the mend.
As earnings season winds to a close, traders considered encouraging earnings data from Sears Holdings (SHLD), Gap (GPS) and Campbell's Soup (CPB), prompting some of the gains in equities.
On the corporate front, media reports indicated that the government is making preparations for auto icon General Motors (GM) to enter bankruptcy later next week.
The Dow slipped 14.81 to 8277.32, the Nasdaq lost 3.24 to 1692.01, and the S&P 500 shed 1.33 to 887.
Helping to buoy the Dow were shares of McDonald's (MCD) which added 2.5 percent on the day. With the climb, the stock extended recent gains, moving to its highest level since February.
Meanwhile, shares of Disney (DIS) and E.I. Du Pont De Nemours (DD) were also higher, rising by 2 percent and 1.7 percent, respectively, taking back some of their recent losses.
The blue chip index was limited by shares of General Motors (GM) which plunged 25 percent, as the firm is likely heading towards bankruptcy.
Weakness was also visible in shares of Bank of America (BAC), which fell 3 percent.
The majority of sectors are posting gains in afternoon trading, contributing to the mild climb seen by the major averages on the day.
Resource stocks continue to turn in one the day's best performances, with gold stocks seeing considerable strength.
Strength also emerged in railroad and oil service stocks, with the Dow Jones Railroads Index and the Philadelphia Oil Services Sector Index climbing by 0.9 and 1.7 percent, respectively.
Notable weakness was apparent in airline stocks, as reflected by a fall of 2.1 percent in the Amex Airline Index. With the decline, the index continues to give back recent gains, falling to its lowest level since late April.
Meanwhile, banking and healthcare stocks also limited the day's gains.
In Focus: Credit Card Legislation, Earnings, Corporate News
President Barack Obama approved a major regulatory overhaul for the credit card industry later today, after the legislation flew through Congress this week. The new rules for the largely unregulated credit card industry are designed to protect consumers from surprise charges and rate increases.
The bill would protect consumers from arbitrary interest rate, fee and finance charge increases and prohibit universal default on existing balances. It would also prohibit interest charges on paid-off balances from previous billing cycle.
General Motors (GM) may be sent into bankruptcy protection by the U.S. government as early as the end of next week, according to the Washington Post.
Under the tentative bankruptcy plan, GM reportedly could receive just short of $30 billion in additional federal loans, pushing the government's investment in the automaker to nearly $45 billion. The report stated that the planned capital injection was just a starting point in discussions and could change.
The move comes as the Obama administration is preparing to lift Chrysler LLC out of bankruptcy next week.
According to reports, lawmakers will invite the CEOs of GM and Chrysler to testify on dealer closings.
Diversified healthcare giant Johnson & Johnson (JNJ) announced Thursday that it agreed to acquire a development stage biopharmaceutical company, Cougar Biotechnology Inc. (CGRB), for about $1.0 billion in a cash tender offer. Following the news, Cougar's shares jumped 23 percent, while JNJ was flat.
On the earnings front, Sears Holdings (SHLD) announced a surprising first-quarter profit Friday morning, even as revenues dived $1 billion. The firm reported adjusted of $0.38 cents a share, beating the consensus estimate for a loss of $0.88 cents a share. Shares rose 10 percent.
Retailer Gap Inc. (GPS) reported first-quarter earnings after the closing bell on Thursday. The firm announced net income of $215 million or $0.31 per share, compared to $249 million or $0.34 per share in the same quarter last year. Traders reacted positively to the news, as the stock rose 2.5 percent
Campbell Soup (CPB), the world's largest soup maker, said Thursday after the markets closed that its third quarter profit dropped 67 percent from last year, when results were boosted by a hefty gain from the sale of the Godiva Chocolatier business. Shares of Campbell Soup rose 1 percent
In other news, the Office of Thrift Supervision announced Thursday the closing of Florida-based BankUnited FSB, and named the FDIC as receiver. Investors led by John Kanas invested $900 million to acquire the new BankUnited, making it one of Florida's best capitalized banks.
In overseas trading, stock markets across the Asia-Pacific region finished lower on Friday. Japan's benchmark Nikkei 225 Index slipped by 0.4 percent and Hong Kong's Hang Seng Index fell 0.8 percent.
Meanwhile, the major European markets closed modestly higher. The French CAC 40 Index and the German DAX Index both finished higher by 0.3 percent. The U.K.'s FTSE 100 Index also closed mildly higher, rising by 0.4 percent.
The benchmark ten-year note opened higher but plunged ahead of the opening bell on Wall Street. Subsequently, the yield on the note closed at 3.4533 percent, a jump of 9.08 basis points on the day.
Overall, treasuries showed considerable pullback on the week, with the yield on the benchmark note climbing by 33 basis points. With the retreat, the yield on the benchmark note posted its worst levels since November 19th.
The dollar fell to its lowest level in 2009 versus the euro and remained under heavy assault by the sterling. The yen has joined the party this week, and resource-linked currencies like the loonie and aussie have been bolstered by rising oil and metals prices.
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