RTTNews - After failing to sustain an early upward move, stocks turned in a lackluster performance over the course of the trading day on Friday. The major averages eventually ended the session mixed, with the tech-heavy Nasdaq closing modestly higher.

The initial strength in the markets came as traders reacted to positive news from the tech sector, with computer maker Dell (DELL) reporting better than expected quarterly results and semiconductor giant Intel (INTC) raising its third quarter guidance. Nonetheless, buying interest waned not long after the opening bell.

Traders largely shrugged off the day's economic data, including a report from Reuters and the University of Michigan that showed their final consumer sentiment index reading for August came in at 65.7 compared to the mid-month reading of 63.2. The revised index came in well above economist estimates of 64.0 but still below July's 66.0.

In a separate report, the Commerce Department said that personal income was nearly unchanged in July following a revised decrease of 1.1 percent in June. Economists had expected income to increase by 0.1 percent compared to the 1.3 percent drop originally reported for the previous month.

The report also showed that personal spending rose 0.2 percent in July compared to an upwardly revised 0.6 percent increase in the previous month. The modest increase came in line with economist estimates.

With income unchanged and spending rising, personal saving as a percentage of disposable personal income fell to 4.2 percent in July compared with 4.5 percent in June.

While the Nasdaq managed to end the session just above the unchanged line, the Dow and the S&P 500 posted modest losses. The Nasdaq closed up by 1.04 points or 0.1 percent at 2,028.77, while the Dow fell by 36.43 points or 0.4 percent to 9,544.20 and the S&P 500 dipped by 2.05 points or 0.2 percent to 1,028.93.

Despite the mixed performance on the session, the major averages all closed modestly higher for the week. The Dow and the Nasdaq both rose 0.4 percent for the week, while the S&P 500 posted a weekly gain of 0.3 percent.

Sector News

Health insurance stocks saw a considerable pullback on the day, with the Morgan Stanley Healthcare Payor Index posting a loss of 2 percent. The index moved further off the ten-month closing high it set on Tuesday.

Tobacco, trucking, and defense stocks also moved lower over the course of the trading day, contributing to the losses by the Dow and S&P 500.

On the other hand, the semiconductor sector saw one of the day's strongest performances, with the Philadelphia Semiconductor Index closing up 2.4 percent. The day's upward move helped to lift the index to an eleven-month closing high.

Strength was also visible among electronic storage stocks, with the NYSE Arca Disk Drive Index posting a gain of 0.9 percent. With the modest gain, the index was able to finish at its best closing level in eleven months.

The index was boosted by shares of Seagate Technology (STX), which gained 3.2 percent on the day and finished at their highest price in nearly one year's time.

Gold stocks also saw strong gains amid a notable increase by the price of the precious metal. With gold for December delivery closing up $11.50 at $958.80 an ounce, the NYSE Arca Gold Bugs Index finished up by 1.5 percent.

Dow Components

Merck (MRK) turned in one of the Dow's worst performances, with the drug giant sliding by 1.7 percent. With the loss, shares of Merck pulled back further off the eleven-month closing high set on Tuesday.

Boeing (BA) also saw notable weakness, retreating by 1.5 percent on the day. The loss comes after the stock surged up 8.4 percent on Thursday following news that the firm's first flight of its 787 Dreamliner is expected by the end of the year.

JP Morgan (JPM), Exxon Mobil (XOM), McDonald's (MCD) and IBM Corp. (IBM) also retreated considerably, falling more than 1 percent each.

On the other hand, shares of Intel surged higher after the company raised its third quarter guidance. The semiconductor giant posted a 4 percent gain, reaching its best closing level in eleven months.

Citing stronger than expected demand for microprocessors and chipsets, Intel said it now expects to report third quarter revenue of $9.0 billion, plus or minus $200 million, compared to its previous forecast for revenue of $8.5 billion, plus or minus $400 million.

Travelers, (TRV), American Express (AXP) and Alcoa (AA) also saw notable gains, although they rose by much more modest margins.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Friday, with Japan's benchmark Nikkei 225 index closing up 0.6 percent. Hong Kong's Hang Seng Index bucked the uptrend, however, ending the day down 0.7 percent.

The major European markets also moved higher over the course of the trading day, with the French CAC 40 Index and the German DAX Index advancing 1.2 percent and 0.9 percent, respectively, while the U.K.'s FTSE 100 Index closed up 0.8 percent.

In the bond market, treasuries ended the day modestly higher after seeing some weakness earlier in the session. The yield on the benchmark ten-year note, which moves opposite of its price, closed down 1.1 basis points at 3.451 percent.

Looking Ahead

Economic data is likely to be in focus next week, with the Labor Department scheduled to release its monthly employment report on Friday. The report is expected to show that non-farm payroll employment fell by 225,000 jobs in August.

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