Stocks edge higher on consumer spending data

Published on NewsOK Modified: March 28, 2014 at 4:03 pm •  Published: March 28, 2014
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NEW YORK (AP) — A positive report on U.S. consumer spending helped push stocks mostly higher Friday for the first time in three days.

The gains were modest as investors continued to cut their holdings in biotechnology stocks, some of the best performing names of 2013. Instead, the stocks that advanced the most were mostly mature, large companies such as Microsoft, Exxon and Cisco Systems.

The Dow Jones Industrial average rose 58.83 points, or 0.4 percent, to 16,323.06. The Standard & Poor's 500 index rose 8.58 points, or 0.5 percent, to 1,857.62. The Nasdaq composite, which includes a number of large biotech companies, rose just 4.53 points, or 0.1 percent, to 4,155.76.

The biggest gainer in the Dow was Microsoft, which rose 94 cents, or 2.4 percent, to $40.30. The company announced Thursday that it was bringing Microsoft Office to the iPad and would shift its focus away from Windows, a move that analysts liked. Satya Nadella made the announcement in his first public appearance as the new leader of Microsoft.

"We continue to view (Office on the iPad) as a massive revenue and operating profit opportunity for Microsoft," analysts at Credit Suisse said in a report Thursday.

Microsoft helped lift other large technology companies, with Cisco Systems, Intel and Oracle up roughly 1 percent or more.

In contrast to technology, biotechnology had another horrible day. Gilead Sciences, Biogen Idec and Vertex Pharmaceuticals were all down 4 percent or more.

The higher they rise, the harder they fall, investors say. Biotechnology stocks had been among the hottest sectors in the stock market for the last two years, with the S&P 500 Biotechnology index rising 74 percent in 2013 and 38 percent in 2012.

That momentum stopped dead in the month of March. The S&P 500 Biotechnology index is down 12 percent this month alone, erasing all of the sector's gains in January and February.

The sell-off in biotech echoes the pullback investors have seen speculative technology stocks, such as Twitter, Netflix and Tesla Motors. Those stocks are down between 14 percent and 20 percent this month alone.

"The high-momentum names have lost all the traction they had in the past year," said John Fox, director of research at Fenimore Asset Management.