Stocks fall after bad Intel, oil news

NEW YORK — Stocks fluctuated before closing slightly lower Friday after a Federal Reserve governor's upbeat comments on inflation helped ease worries about a bleak forecast from Intel. The major indexes finished mixed for the week.

At the close of trading, the Dow Jones industrial average lost 3.92 to 11,021.59.

Microsoft, one of the 30 Dow stocks, slipped 4 cents Friday to close at $26.93, ending up 1.1.percent for the week. Boeing, also a Dow stock, gained 59 cents Friday to $73.39, but was off 0.3 percent for the week.

Broader stock indicators also finished lower. The Standard & Poor's 500 index dropped 1.91 to 1,287.23, and the Nasdaq composite index slid 8.51 to 2,302.60.

The market first fell on Intel's news, but rallied after Fed Vice Chairman Roger Ferguson suggested that core-price inflation was under control and hinted at a moderating fiscal policy from the central bank. An afternoon rise in oil prices — which fed Wall Street's concerns about inflation — eroded those gains.

Meanwhile, news that the nation's service sector grew faster than expected last month countered a drop in consumer confidence, lending some stability to a market stifled recently by concerns about more interest-rate increases and rising energy costs.

"In general, there's still a decent amount of momentum coming off the start of the year, which typically tends to support the market," said Steven Goldman, chief market strategist for Weeden. "Stocks should hold up well assuming we don't get a sharp rise in long-term [bond] rates here."

Friday's up-and-down trading mirrored the erratic behavior on Wall Street this week as nervous investors reacted sharply to a mix of economic news on the housing market and retail sales, which in turn fed speculation about further rate increases from the Fed. For the week, the Dow lost 0.36 percent and S&P 500 fell 0.17 percent, while the Nasdaq gained 0.68 percent.

Despite Friday's decline, Jay Suskind, head trader at Ryan, Beck & Co., said he felt Ferguson delivered a promising message about the underlying strength of the economy and that the existing risks are manageable.

"I think what you have is a manic market," Suskind said. "The market reacts differently to the news each day. One day it's sure of a strong economy and controlled inflation; the next day, it reads higher rates from the Fed."

Intel's warning sent its stock down 17 cents to $20.32, near a 52-week low of $19.88. The chipmaker lowered the midpoint of its projected quarterly revenue by $500 million, adding that its gross margins would also be impacted by lower sales.