US stocks: Shares inch up before holiday

NEW YORK - US stocks posted slight gains in light trading on Friday before the holiday weekend as higher oil prices lifted shares of energy companies like Exxon Mobil, offsetting a slide in drug maker Pfizer, and investors took a shine to some specialty retailers.

The Nasdaq closed up for the fourth week in a row, while the Dow Jones industrial average and the Standard & Poor's 500 were each up for two weeks straight.

The Dow Jones industrial average gained 4.95 points, or 0.05 per cent, to end at 10,542.55. The Standard & Poor's 500 Index gained 1.16 points, or 0.10 per cent, to finish at 1,198.78. The technology-laced Nasdaq Composite Index gained 4.49 points, or 0.22 per cent, to close at 2,075.73.

For the week, the blue-chip Dow average gained 0.67 per cent, while the S&P 500 advanced 0.80 per cent and the Nasdaq Composite Index climbed 1.43 per cent.

Investors retained a positive outlook on the US economy, despite Commerce Department figures showing that consumer spending rose a slimmer-than-expected 0.6 per cent in April.

"The March soft patch was overdone. You've seen a lot of data revised and a lot of the later data looks OK," said John Caldwell, chief investment strategist at McDonald Financial Group, of Cleveland, Ohio. "We should feel pretty comfortable at this point." Christopher Johnson, director of quantitative analysis at Schaeffer's Investment Research, of Cincinnati, Ohio, said investors appeared to be cautious before the long weekend and next week's heavy calendar of economic data.

"You're seeing a market that doesn't want to make a commitment ahead of a heavy week of fundamental numbers coming out," Johnson said. "It's treading water today." The May US non-farm payrolls report will be released on Friday.

OIL COMPANIES, RETAILERS GAIN

Crude oil for July delivery rose 84 cents to settle at US$51.85 a barrel, whetting some investors' appetites for energy stocks.

Exxon Mobil Corp. was up 1 per cent, or 58 cents, at US$56.80. It was the Dow's second-biggest percentage gainer.

Also in the oil sector, Chevron Corp. rose 1.6 per cent, or 86 cents, to US$54.58, and ConocoPhillips gained 2.4 per cent, or US$2.47, to US$107.55. All three oil companies trade on the NYSE.

Shares of insurer American International Group Inc. climbed 1.24 per cent, and ranked as the Dow's biggest percentage gainer.

AIG shares added 69 cents to close at US$56.40, adding to gains on Thursday after New York state authorities filed suit against AIG, its former CEO Maurice "Hank" Greenberg and its former chief financial officer. New York Attorney General Eliot Spitzer and New York Insurance Superintendent Howard Mills cited a pattern of fraud at AIG, the world's biggest insurer by market value. Some traders linked the rise in the stock's price to relief that the lawsuit did not point to any new charges.

The Nasdaq was driven higher by specialty home furnishing retailer Bed Bath & Beyond Inc., which rose 1.8 per cent, or 70 cents, to US$40.42. Shares of specialty apparel retailers Chico's FAS Inc. and Wet Seal Inc. rallied after better-than-expected quarterly results.

Chico's gained 8.4 per cent, or US$2.63, to US$33.85 on the NYSE. Wet Seal was up 8.8 per cent, or 34 cents, at US$4.19 on Nasdaq.

PFIZER, ORBITAL DROP

Pfizer Inc. was down 1.9 per cent, or 54 cents, at US$28.36 on the NYSE after the US Food and Drug Administration said it has received more than 40 reports of a type of blindness in men taking impotence drugs, mostly involving Pfizer's Viagra. An FDA spokeswoman said there was no proof that the blindness was caused by the drug.

The stock of Orbital Sciences Corp., a maker of satellites and launch vehicles, dropped after it said it was the subject of a federal probe into government contracting procedures. Orbital shares fell 8.6 per cent, or 91 cents, closing at US$9.66 on NYSE.

Ditech Communications Corp. plunged 38.1 per cent, or US$4.80, to close at US$7.79. Late Thursday, the telecommunications equipment maker warned future orders were off sharply.

LIGHT PRE-HOLIDAY TRADE

Trading was light ahead of the three-day weekend, which includes the US Memorial Day holiday on Monday. US stock, bond and the NYMEX energy markets will be closed Monday.

About 1.04 billion shares changed hands on the NYSE, well under the 1.46 billion daily average for last year. On the Nasdaq, about 1.26 billion shares were traded, sharply beneath the 1.81 billion daily average last year.

The number of advancing shares exceeded the number of decliners on the NYSE by 11 to 5. Advancers outnumbered decliners on the Nasdaq by 17 to 13.

"I haven't seen a picture of the NYSE floor today, but I'd guess they're chipping golf balls down there at this point, Caldwell joked in an early afternoon interview.

- REUTERS