Wall Street stocks finished lower after a sharp afternoon sell-off yesterday, as investors digested a mixed bag of earnings news and booked profits in the wake of Thursday’s gains.

The Dow Jones Industrial Average fell 0.6 per cent to 10,157.71, a day after blue chips booked their strongest single-day performance in more than two years. The S&P 500 fell 0.7 per cent to 1,152.14, and the Nasdaq Composite fell 1.5 per cent to 1,932.19.

For the week, the Dow rose 0.7 per cent, the S&P 500 rose 0.8 per cent, and the Nasdaq Composite rose 1.3 per cent after surging share prices on Thursday lifted the leading US indices from 2005 lows.

The volatile performance underscored the lack of consensus on both Wall Street and Main Street about the strength of the US economy and the prospects for corporate earnings in the months ahead.

“People are very nervous,” said Al Goldman, chief market strategist at AG Edwards.

Market watchers said the big swings in share prices in recent sessions were driven in part by worries about the growing US trade and budget deficits and a glut of short-term, speculative money in the equity markets.

Data showing a sharp rise in consumer prices, an upbeat manufacturing survey and the steepest fall in weekly jobless claims since late 2001 contributed to the uncertain mood.

Technical trading also played a role in the big movements this week. A sharp fall last Friday dragged the S&P 500 below its 200-day moving average, a critical support level that may have triggered stop-loss selling this week. The S&P closed below that level again on Friday, raising the prospect of a further selloff when trading resumes next week.

3M, the diversified manufactuer, led Dow decliners on Monday. Its shares fell 4.7 per cent for the week in spite of improved earnings.

Shares in Adobe, the software group, slipped 0.6 per cent for the week after it agreed to acquire Macromedia, a software rival, for $3.4bn in stock. Macromedia shares surged 21.2 per cent for the week to $39.90.

General Motors ended the week higher after it reported a $1.1bn quarterly loss and abandoned its full-year guidance. Ford Motor, GM’s chief US rival, rose 4.5 per cent for the week after it reported steep losses for the quarter. Shares in both companies fell sharply after they issued profit warnings earlier this year.

Intel dominated trading on Wednesday after reporting profits up 25 per cent on strong sales. Shares in the world’s biggest maker of computer chips rose 5.1 per cent for the week.

Internet stocks received a boost after Google weighed in with a five-fold increase in quarterly profits late on Thursday, boosting shares more than 7 per cent on Friday and 16.7 per cent on the week to $219.84.

Yahoo, Google’s main search engine rival, rose 7.4 per cent for the week.

Pharmaceuticals took a beating after several big drug companies reported disappointing earnings for the quarter. Pfizer fell 1.8 per cent and Merck shed 1.7 per cent for the week.

Eastman Kodak fell 9.4 per cent on Friday after it swung to a quarterly loss. The shares fell 10.7 per cent for the week.

Caterpillar led Dow gainers on Wednesday after it reported higher profits and raised its full-year guidance. Shares, which fell sharply this year after a strong performance in 2004, rose 7.6 per cent this week. Motorola was among the leading gainers in Thursday’s sharp rally. Its shares rose 7 per cent this week after the handset maker reporter higher profits.

Archipelago Holdings, the electronic stock exchange, put on the most exciting performance this week. Its shares rocketed more than 74 per cent after it agreed to a historic merger with the New York Stock Exchange.

Nasdaq Stock Market Inc, the NYSE’s biggest rival, jumped 28 per cent for the week after it agreed to acquire Instinet, an electronic trading group, on Friday. Instinet shares fell 19.7 per cent for the week.

America West, the airline, fell 15.4 per cent this week amid reports that it was in talks to buy US Airways, the bankrupt US carrier.

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