US stocks are mostly flat in afternoon trading
By BERNARD CONDON
The Associated Press | May 11,2013
Kenneth Polcari, right, works with fellow traders on the floor of the New York Stock Exchange on Wednesday. Japan’s benchmark stock index surged Friday after the dollar hit a four-year high against the yen. Markets elsewhere gained as traders digested a positive U.S. jobs report.
NEW YORK — The stock market was mostly flat in afternoon trading Friday but is still on track to finish the week higher.
The Dow Jones industrial average fell 10 points to 15,072 at 2:44 p.m. Eastern Daylight Time. The Dow is up 0.7 percent for the week and 15 percent so far this year. The broader Standard & Poor’s 500 was up two points to 1,629.
The price of commodities including crude oil and gold fell as the dollar continued to strengthen against other currencies, especially the Japanese yen. That, in turn, pushed down several Dow stocks tied to commodity prices.
Exxon Mobil and Chevron each fell 1 percent.
Among stock gainers, Priceline.com and chip maker Nvidia both rose about 4 percent after reporting higher earnings. Priceline jumped $26.37 to $764 and Nvidia was up 62 cents to $14.53.
Clothing store chain Gap rose after reporting higher sales in April and predicting first-quarter earnings that were higher than financial analysts expected. Gap rose $2.08 to $40.89, or 5 percent.
Nearly all companies in the S&P 500 have reported first quarter earnings. The average net income for companies in the index is expected to rise 5 percent, according to S&P Capital IQ, a research firm. But revenue has fallen short in many cases, suggesting that companies are mostly cutting expenses to post higher profits.
Some investors are worried that companies won’t be able to keep cutting and profit growth will slow, but stocks have gone higher anyway.
“The talk at the end of April was company earnings are slowing ... and it seemed like we’d have another ‘Sell in May,’” said Gary Flam, who manages stock portfolios at Bel Air Investment Advisors. “But clearly that’s not been the case in the first ten days.”
The S&P has risen every day since the beginning of the month until Thursday, when it fell six points. The Dow rose above 15,000 for the first time Tuesday and it’s stayed there since. The Nasdaq is at 12-year highs.
Flam speculates that stocks are rising partly because investors have shifted from fear to greed.
“The last few years, risk was defined as losing money,” he said. “The last few months, it’s been defined as not making money.”
Five of the ten industry groups in the S&P 500 index were higher. Health care stocks rose the most, 0.7 percent.
The Nasdaq composite index was up 22 points at 3,430.
The Russell 2000, an index of small companies, was up eight points, or 0.8 percent, to 974. For the week, the Russell is up 2.1 percent, or more than twice the gains of the Dow and S&P 500.
One dollar was worth 101.59 yen, more than the 100.54 yen it bought late Thursday. The yen has been weakening since last fall as the Bank of Japan floods the Japanese economy with cash in an effort to shake the country out of a two-decade slump.
Japanese stocks surged. A weaker yen is a boon to Japanese exporters of cars, electronics and other goods because they can charge cheaper prices in overseas markets. Tokyo’s benchmark Nikkei 225 index jumped 2.9 percent to close at 14,607, its highest level since January 2008.
Prices for crude oil and gold fell. Crude fell 35 cents to $96.04 a barrel in New York, a loss of 0.4 percent. Gold fell $32 to $1,436 an ounce, or 2.2 percent.
When the dollar rises against other currencies, it tends to weaken demand for commodities. Since commodities are priced in dollars, buyers using other currencies get less for their money when the dollar appreciates, and they respond by buying less.
Among other stocks in the news:
n Falling commodity prices also weighed on Dow members Alcoa, the aluminum giant, and Caterpillar, which makes mining equipment. Both dropped more than 1.5 percent.
n True Religion Apparel, known for high-priced jeans, rose 2.16, or 7.3 percent, to $31.60 after announcing it had agreed to a buyout offer of about $826 million from the investment management firm TowerBrook Capital Partners LP.
n Dell climbed after activist investor Carl Icahn and another big investor fighting founder Michael Dell’s offer to take the company private launched another broadside against the plan. In a letter to Dell’s board, they proposed a deal that would keep the company public and pay shareholders cash or stock worth $12 a share. Dell rose to 14 cents, or 1 percent, to $13.46 per share.