Dow, S&P end higher on financials, down for week

NEW YORK - The broader US stock market edged higher on Friday, but still posted its worst week since May, as a rally in financial stocks helped reverse losses sparked by a government report showing the US jobless rate rose to a five-year high.

Financial shares rebounded in afternoon trading, amid hopes the US Treasury would take steps over the weekend to rescue mortgage finance companies Fannie Mae and Freddie Mac. After the closing bell, The Wall Street Journal reported the Treasury is close to finalizing a plan to backstop Fannie and Freddie.

Also helping financials, Lehman Brothers rose 6.8 per cent to US$16.20 after sources familiar with the situation said Blackstone Group LP and Kohlberg Kravis Roberts & Co are each looking to buy parts of Lehman's real estate and asset management units.

But the day had started on a sour note, with the Dow falling more than 100 points after news that the unemployment rate jumped to 6.1 per cent added to worries about consumer spending and compounded fears of a worsening global economic slowdown. Those fears had battered stocks all week, leaving the S&P 500 with its worst five-day performance since May.

The Nasdaq lagged the other indexes on Friday and had its worst week since January, led lower by big-cap technology shares. Analysts say technology is among sectors most vulnerable to a global slowdown due to its exposure to overseas markets.

The Dow Jones industrial average rose 32.73 points, or 0.29 per cent, to 11,220.96, but ended down 2.8 per cent on the week.

The Standard & Poor's 500 Index climbed 5.48 points, or 0.44 per cent, to 1,242.31, ending down 3.2 on the week.

The Nasdaq Composite Index, meanwhile, slipped 3.16 points, or 0.14 per cent, to 2,255.88, ending the week 4.7 per cent lower.

Source: Singapore Business Times - 06 Sep 2008