Today: Wall Street moves higher in a shortened session as beleaguered tech stocks receive a holiday reprieve. Also: Retailers enjoy Black Friday, but online shopping expected to be profitable this year as well.
Wall Street shoots higher as investors target technology stocks that have suffered
Black Friday bargain shoppers weren't just at the malls this year, as investors on Wall Street picked up shares in technology companies that have struggled this year, sending indexes back above landmark levels.
During a session that closed at 10 a.m. Pacific time in a nod to the Thanksgiving holiday that closed markets on Thursday, all three major U.S. stock indexes gained at least 1.3 percent, with the Dow Jones closing higher than 13,000 and the Standard & Poor's surpassing 1,400. The tech-heavy Nasdaq composite index closed short of the 3,000 mark, but had the largest gain of the day at 1.4 percent.
As evidenced by the Nasdaq's move, tech stocks were an important driver for Friday's gains, with investors looking to grab Silicon Valley stocks, such as companies in the damaged personal-computer industry, that have fallen steadily in the past few months. The SV150 index of the region's largest tech companies increased more than the major national indexes with a 1.5 percent bump.
"Anyone that was on the sidelines waiting for a pullback like the one we just had in some of the tech names, they're looking for any glimpse of strong price action for 'permission' to enter into those (stocks)," Todd Salamone, director of research at Schaeffer's Investment Research, told Reuters.
Hewlett-Packard (HPQ), which fell to decade lows after announcing a poor quarter and accusing acquisition Autonomy of using illegal accounting tricks to push up its valuation, rose 4.2 percent, helping the Dow. HP closed at $12.44, 9.6 percent higher than the low it hit on the day of its earnings report.
Autonomy founder Mike Lynch continued to deny HP's accusations, blaming different accounting methods in the U.S. and internationally, but the FBI is still investigating the Palo Alto company's claims as it seeks to pull out of the death spiral to which its history of failed acquisitions has contributed. HP continues to face difficulties on other fronts, as it was forced to answer an SEC inquiry with a Friday letter denying it sells equipment directly to Syria.
Other PC-industry stocks also rebounded Friday, with Microsoft gaining 2.8 percent, Santa Clara chipmaker Intel (INTC) increasing 1.9 percent as it continues hunting for a new CEO, Sunnyvale chipmaker Advanced Micro Devices jumping 4.3 percent, and HP rival Dell growing by 5.4 percent.
Canadian mobile-tech company Research in Motion had one of the largest increases on the day, jumping 13.7 percent as it nears the Jan. 30 release of its newest operating system, which it hopes will pull the company's shares out of a long-term downward spiral. RIM stock, which once surpassed $140, closed Friday at $11.66 after a gain of $1.40.
Sunnyvale Internet company Yahoo (YHOO), which hit its highest point in 18 months earlier this week, surpassed that high Friday with a daily gain of 0.9 percent that pushed it to a closing price $18.57. Apple (AAPL), which had a huge rebound Monday after being pushed down more than 20 percent, known as a "bear market," increased another 1.7 percent Friday to close at $571.50, its highest closing price in more than two weeks.
Tech infrastructure companies were also popular Friday, with San Jose networking giant Cisco (CSCO) gaining 2 percent, Sunnyvale rival Juniper increasing 3 percent, and Palo Alto virtualization company VMware rising 1.9 percent. Software companies weren't left out, either: Oracle (ORCL) rose 1.7 percent, Adobe (ADBE) matched that gain, and Palo Alto social-networking software company Jive increased 3.9 percent.
The one tech sector to miss out on Friday's gains seemed to be social-networking, as Facebook fell 1.3 percent to break a recent string of successes, despite big-money acquisition Instagram announcing Thanksgiving was its busiest day in history. Zynga also descended, losing 2.5 percent, while LinkedIn traded flat.
Shoppers out in full force from Thanksgiving Day through Black Friday
While investors searched for bargains on Wall Street, Americans descended on retail outlets in the annual start to the holiday shopping season known as Black Friday. Continuing a trend from the past couple years, sales actually started on Thanksgiving Day, and some shoppers stayed out all night, hopping from store to store.
"After Walmart, I'm going to Target next," Fremont resident Katrina Anderson said Thursday evening as she filed into the retail giant in her hometown. "Then I will be going to Babies R Us, Toys R Us. Eventually I will get to Sears and Home Depot."
Three separate "door-buster" promotions from Thursday evening through early Friday morning helped Wal-Mart set records for sales, the company announced Friday, helping send its stock price up 1.9 percent.
Anecdotally, shoppers said deals weren't as good as last year, but bargain-seekers seemed more willing to spend this year as the economy has healed even more from the Great Recession.
Melanie Black, general manager of Eastridge Mall in San Jose, said she was "shocked" by the crowds packing the mall after its midnight opening. "This is what it was four or five years ago," she said, happy to see the return of pre-recession crowd levels.
Retailers hope that Americans get back to spending big money for the holiday season, as their profitability depends on it.
"You live or die based upon whether you win Black Friday," retail consultant Britt Beemer said.
Online shopping expected to grow strongly this year, with tablets at top
Strong crowds at brick-and-mortar stores aren't expected to hurt online shopping, however: E-commerce is likely to grow 16.4 percent this year while physical retail sales grow just 3.9 percent, Jefferies analysts reported this week. ComScore predicts an even larger increase of 17 percent.
The growth seems to have already started, with ComScore reporting that $10.1 billion was spent online between Nov. 1 and Nov. 18, 16 percent more than the same period last year. PayPal, San Jose-based eBay's (EBAY) online payments system, reported Friday that customers almost tripled their online purchases through the company's mobile shopping on Thanksgiving Day this year.
eBay and Amazon should dominate online purchases this holiday season, ChannelAdvisor CEO Scot Wingo said this week. "The eBay and Amazon marketplaces are looking the strongest heading into the holiday," he wrote in a blog post. eBay and Amazon shares both increased 0.8 percent Friday.
Tablets are at the top of many wish lists, according to an Ipsos/Thomson Reuters poll, though Apple's new iPad Mini isn't showing up in many people's letters to Santa. Only 8 percent of those saying they wanted a new tablet this holiday season were yearning for the smaller version of Apple's iconic tablet, the same percentage that wanted Microsoft's new Surface offering. The full-sized iPad still topped lists, however.
Silicon Valley tech stocks
Down: Zynga, Workday, Facebook, Tesla, Applied Materials
The tech-heavy Nasdaq composite index: Up 40.30, or 1.38 percent, to 2,966.85
The blue chip Dow Jones industrial average: Up 172.79, or 1.35 percent, to 13,009.68
And the widely watched Standard & Poor's 500 index: Up 18.12, or 1.3 percent, to 1,409.15
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.