Stocks ended an uneasy week mostly higher yesterday as a jury verdict against Merck over its painkiller Vioxx erased much of an earlier...
NEW YORK — Stocks ended an uneasy week mostly higher yesterday as a jury verdict against Merck over its painkiller Vioxx erased much of an earlier advance fueled by bargain hunting. The major indexes all suffered losses for the week.
The Dow Jones industrial average rose 4.30 to close at 10,559.23.
Microsoft, one of the 30 Dow stocks, slipped 10 cents yesterday to close at $26.72 a share, ending the week down 0.9 percent. Boeing, also a Dow stock, gained 52 cents to $67.15, ending up 0.9 percent for the week.
Broader stock indicators finished mixed. The Standard & Poor’s 500 index gained 0.69 to 1,219.71, while the Nasdaq composite index slipped 0.52 to 2,135.56.
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The Dow fell 0.4 percent for the week while the S&P 500 lost 0.9 percent and the Nasdaq dropped 1 percent.
Trading was expected to be volatile during yesterday’s session on Wall Street due to the expiration of monthly futures contracts, which customarily prompts investors to make shifts in their holdings.
Wall Street quickly pulled back late yesterday after a Texas court found Merck liable for the death of a man who took Vioxx, and awarded his estate more than $250 million in damages. Merck shares dropped $2.35, or 7.7 percent, to $28.06 at the close of trading.
While stocks gave up some of their gains after the Merck verdict, the market’s reaction was nonetheless muted as investors had previously factored major Vioxx liability into the drug maker’s stock.
The overall market still managed a small gain as bargain hunters took advantage of recent declines and bought up underperforming stocks. Positive analyst reports on Coca-Cola and IBM, as well as indications of continued growth in China from Caterpillar, also encouraged investors.
The advance held despite a jump in crude-oil futures, which rose on news of demonstrations in Ecuador that have disrupted oil exports. A barrel of light crude surged $2.08 to settle at $65.35 on the New York Mercantile Exchange.
Despite yesterday’s gain, stocks were pressured for much of the week by evidence of inflation brought on by higher energy costs, especially after the government’s inflation reports showed big jumps in wholesale and consumer prices during July.
Wall Street has languished this month after rallying in July on strong corporate earnings and growth in the economy. Uncertainty about where the market is headed has had investors trading lightly as they grapple with the effects of soaring oil prices amid improved economic data and persistently low interest rates.
But analysts found some positive signs.
“I guess all things considered, the market’s been pretty impressive in the face of oil prices,” said Barry Berman, head trader at Robert W. Baird & Co. “It would appear that way looking at the fact that interest rates are still low on a relative basis. Lower rates are going to keep the economy going.”
Dow component Coca-Cola fueled the mildly bullish sentiment early in yesterday’s session. Analysts at UBS upgraded the stock to “buy” from “neutral,” citing the company’s stronger marketing efforts and improved sales forecasts. Coca-Cola gained 86 cents to $44.39.
IBM added $1.61 to $82.76 following a report from Prudential Securities that said the company is poised for a strong second half, when clients often increase spending.
Prudential analysts also noted IBM is benefiting from layoffs and remains a better pick than rival Hewlett-Packard.
News of industrial growth in China lifted Caterpillar, another Dow component, which rose $1.67 to $54.82. The world’s top maker of heavy machinery said it signed three nonbinding deals with a government-affiliated industrial developer in China.