Market gains back a little after plunge
Traders decided that the stock market has suffered enough, at least for now. After a two-day plunge, stocks ended the week with an advance on Friday, suggesting that Wall Street may be successfully weaned from the Federal Reserve’s easy money after all.
The Dow dropped 560 points on Wednesday and Thursday. Investors recovered their mojo on Friday. The Dow Jones industrial average rose 41.08 points, or 0.3 percent, to close at 14,799.40. The Standard & Poor’s 500 index rose 4.24 points, or 0.3 percent to close at 1,592.43.
Friday’s gain wasn’t enough to erase the market’s loss for the week. The S&P 500 fell 2.1 percent for the week, and the Dow was down 1.8 percent. Stocks have now fallen two weeks in a row, and four of the past five. The real question will be whether the sell-off continues next week, said Frank Fantozzi, CEO of Planned Financial Services. So far, the market’s swoon this week appears to be more of an adjustment than the beginning of a long-term rout.
Many investors have been predicting some kind of pullback in the market following its nearly unbroken advance since last fall. The S&P 500 index rose for seven straight months through May. So far in June it’s down 2.1 percent.
Sentence of ex-Enron CEO reduced
One of the country’s most notorious financial scandals came to a protracted legal conclusion Friday as ex-Enron Corp. CEO Jeffrey Skilling – already in prison for his role in the once-mighty energy giant’s collapse – was resentenced to 14 years as part of a court-ordered reduction and a separate agreement with prosecutors.
Skilling has been in prison since 2006, when he was sentenced to more than 24 years by U.S. District Judge Sim Lake. But an appeals court vacated his prison term in 2009, ruling that a sentencing guideline was improperly applied.
However, Skilling’s resentencing was delayed for years as he unsuccessfully sought to overturn his convictions, including appealing to the U.S. Supreme Court.
Starbucks raising prices
Starbucks wants a few extra pennies for that latte. The Seattle-based coffee company says it’s hiking prices on average by 1 percent nationally starting Tuesday. The price hike comes despite falling coffee costs that have boosted the company’s profits. In the last quarter, Starbucks cited lower coffee costs for a stronger operating margin, which represents the money it pockets from sales after subtracting what it pays to keep stores running.
BlackBerry making a comeback
BlackBerry is poised to snap a five quarter streak of declining smartphone shipments, a sign its recovery is gaining traction. BlackBerry probably delivered 7.7 million smartphones to customers in the three months ended in May, a Bloomberg survey of analysts shows. That would reverse a plunge to 6 million units in the prior quarter from 11 million a year earlier for the Waterloo, Ontario-based company. New models are the reason for the resurgence.
The Associated Press and Bloomberg News contributed.