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Ahead of the opening bell on Wall Street, a report from the Commerce Department showed that personal income jumped 1.4 percent in May following an upwardly revised 0.7 percent increase in April, although the growth was due in large part to increased government social benefit payments.
Excluding the effects of the stimulus bill, disposable personal income, or personal income less personal current taxes, increased by a much more modest 0.2 percent in May.
The report also indicated that that personal spending rose 0.3 percent in May after coming in unchanged in the previous month. The moderate increase in spending came in line with economist estimates.
Separately, a report from Reuters and the University of Michigan showed that the consumer sentiment index was revised up to 70.8 in June from the preliminary reading of 69.0, coming in well above the May reading of 68.7. Economists had been expecting the index to be unrevised at 69.0.
On the earnings front, KB Home (KBH | Quote | Chart | News | PowerRating) reported a second-quarter net loss of $1.03 per share, compared to a net loss of $3.30 per share for the same period last year. Analysts expected the company to report a loss of $0.64 per share for the quarter.
Meanwhile, Qantas said that it has reached a mutual agreement with Boeing (BA | Quote | Chart | News | PowerRating) to defer the delivery of 15 aircraft by four years and cancel orders for 15 others scheduled for delivery in 2014 and 2015.
The major indices finished the day on a mixed note, failing to sustain a late rally. While the Nasdaq closed up by 8.68 points or 0.5 percent at 1,838.22, the Dow slipped by 34.01 points or 0.4 percent to 8,438.39 and the S&P 500 fell 1.36 or 0.2 percent to 918.90.
With the mixed performance for the session, the major averages also closed mixed for the week. While the Nasdaq posted a 0.6 percent gain for the week, the Dow and the S&P 500 posted their second consecutive weekly losses, falling 1.2 percent and 0.3 percent, respectively.
Sector News
Gold stocks slipped by considerable margins on the day, with the NYSE Arca Gold Bugs Index falling by 1.8 percent. The index continues to bounce around in roughly a six week trading range. The weakness in the sector came despite a modest increase by the price of gold.
Significant losses were also visible among software and housing stocks, resulting in 1 percent declines by both the NYSE Arca Software Index and the Philadelphia Housing Sector Index.
Notable weakness was also visible among natural gas, oil and utility stocks, which partly offset recent gains.
Meanwhile, computer hardware stocks posted strong gains on the day, as reflected by the 2.5 percent climb by the NYSE Arca Computer Hardware Index. The index finished the day at its best closing level in ten months.
Palm (PALM | Quote | Chart | News | PowerRating) led the sector higher, rising by 15.7 percent after reporting a narrower than expected fourth quarter loss. The stock finished at its best level in well over a year.
Electronic storage and health insurance stocks also rose by notable margins on the day, as reflected by a 2.2 percent gain by the NYSE Arca Disk Drive Index and a 1.7 percent jump by the Morgan Stanley Healthcare Payor Index.
Modest gains were also visible among internet, banking, and biotechnology stocks. Notably, the NYSE Arca Biotechnology Index finished the day at its best level in over four months.
Dow Components
A majority of the Dow components finished on the downside, contributing to the modest pullback by the blue chip index.
Shares of American Express (AXP | Quote | Chart | News | PowerRating) led the way lower, falling by 2.8 percent on the day. Despite the notable loss, the stock remains stuck in roughly a two-month trading range.
Microsoft (MSFT | Quote | Chart | News | PowerRating) also slipped, posting a loss of 1.9 percent on the day. With the decline, the stock backed further off of a four-month closing high set in mid-June.
Shares of Boeing (BA | Quote | Chart | News | PowerRating), Chevron (CVX | Quote | Chart | News | PowerRating) and Hewlett Packard (HPQ | Quote | Chart | News | PowerRating) also fell, dropping by comparable margins. Chevron remained in a range, while Hewlett Packard gave back recent gains. Boeing continued to linger near the roughly two-month closing low set on Wednesday.
On the other hand, shares of Merck (MRK | Quote | Chart | News | PowerRating) moved notably higher, rising by 1.6 percent. With the gain, the stock closed at its best price of the month, but largely remained in roughly a four month trading range.
Bank of America (BAC | Quote | Chart | News | PowerRating) shot up by 3.2 percent on the session, but it also continued its drift within a recent trading range.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region ended Friday's session showing moderately strong gains. Japan's benchmark Nikkei 225 Index closed up 0.8 percent, while Hong Kong's Hang Seng Index jumped 1.8 percent.
Meanwhile, the major European markets all finished on the downside, with the German DAX Index and the U.K.'s FTSE 100 Index dropping by 0.5 percent and 0.3 percent, respectively, while the French CAC 40 Index slipped by 1.1 percent.
In the bond markets, treasuries saw solid gains. Subsequently, the yield on the note finished at 3.506 percent, a drop of 4.0 basis points on the day.
Looking Ahead
Looking ahead to next week, the market will look to data on home prices, consumer confidence, manufacturing and employment to guide trading amid the low volume summer season.
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