By Kate Gibson, MarketWatch –
NEW YORK — U.S. stocks on Friday finished mostly lower, but a late surge in financial shares helped the S&P 500 preserve a fourth week of gains after the White House said it would expand a foreclosure-prevention program and hope grew for a Greek debt-deal.
“The big news the last couple of weeks is the program they launched over in Europe, the lending facility to the banking system, seems to be working,” said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.
Down much of the session, the financial sector reversed course in the final hour of trade as the White House said it would loosen rules on a loan-modification program.
The sector also drew a late lift from reports that Facebook plans a much-anticipated Initial public offering next week, with the Wall Street Journal reporting investment banks Morgan Stanley and Goldman Sachs would participate. Both stocks closed near their highs of the session.
The Dow Jones industrial average lost 74.17 points, or 0.6 percent, to end at 12,660.46, down 0.5 percent for its first weekly loss in four.
Chevron Corp. shares were among those weighing on the blue-chip index, down 2.5 percent, after the oil major reported a drop in profit that also fell short of estimates.
Up 4.7 percent for the year so far, the S&P 500 index shifted briefly higher and ended the day down 2.1 points, or 0.2 percent, at 1,316.33, up 0.1 percent from the week-ago close.
Component Ford Motor Co. reported its 11th straight profitable quarter, but the auto maker’s results came in below predictions, and its shares were down 4.2 percent.
“This earnings season hasn’t been nearly as robust as the last couple; there’s a bias toward companies beating versus missing, which is reflecting a slow-growing economy,” according to Fitzpatrick.
Up 1.1 percent for the week, the Nasdaq composite index added 11.27 points, or 0.4 percent, at 2,816.55, with the index up 8.1 percent for the month and year so far.
“We’ve had such a good run, one of the strongest we’ve had in a long time from the start of the year, so we’re overdue,” said Fitzpatrick of the late-week decline in equities.
“There are a lot of bullish surveys, which is usually a clear sign that things are going to correct,” he added.
U.S. stocks had started mostly lower after the U.S. government said the economy grew 2.8 percent in 2011’s final quarter, less than the 3 percent predicted by analysts surveyed by MarketWatch.
A rise in consumer confidence had equities only briefly trimming their decline. The Thomson Reuters/University of Michigan final index of consumer sentiment for January climbed to 75 from 69.9 at the end of December.
Fitch Ratings on Friday afternoon cut the credit ratings of Spain, Italy, Belgium, Cyprus and Slovenia, saying the five nations do not hold enough financial leverage amid the regional debt crisis.
The downgrades, which Fitch warned of in December, came as negotiators for private creditors headed back to Athens for talks on a debt swap to reduce Greece’s borrowings and avoid a possible default.
“We all know it’s just a matter of getting everyone lined up in terms of getting private investors to take a haircut, and here domestically, things have been headed in the right direction,” said Fitzpatrick at Deutsche Bank. “The program they launched over in Europe, the lending facility to the banking system, seems to be working, with yields on Spain and Italy’s sovereign debt making substantial moves in the right direction.”
“The one exception is Portugal, which seems to be headed in the wrong direction and is up another 38 basis points today,” he added.