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Stocks bounce around on global economic worries

Pallavi Gogoi, AP Business Writer

In a Feb 27, 2012 photo traders Christopher Cornette, left, and Gregory Rowe work on the floor of the New York Stock Exchange. Wall Street futures rose early Friday March 23, 2012 as traders awaited the release of U.S. housing data. (AP Photo/Richard Drew)

NEW YORK (AP) -- Stocks are eking out small gains at the end of a week in which the market was weighed down by prospects of a global economic slowdown.

Investors have largely shrugged off signs of strengthening in the U.S. economy and better corporate profits. They're worried about higher oil prices, which could hurt consumer spending, and the latest signs of trouble in the real estate market.

The Dow Jones industrial average edged up 42 points to 13,088 at mid-afternoon Friday. The Standard & Poor's 500 index inched up 5 points to 1,398 and the Nasdaq composite fell five to 3,068.

Home builders and home improvement stocks fell after the Commerce Department said sales of new homes fell 1.6 percent last month. Sales have fallen nearly 7 percent since December. Prices surged to their highest level in eight months, suggesting that builders anticipate more demand in the months ahead. PulteGroup fell 3 percent and Lennar was down over 1 percent, while Lowe's and Home Depot fell a little less than 1 percent.

A wide range of companies including Nike, Oracle, FedEx, and Tiffany have reported stellar earnings this week. However, their accomplishments were marred by worries of how a slowdown in Asia and Europe will affect the companies that rely on global sales, such as Nike, FedEx and Tiffany. Reports in China and Europe earlier in the week pointed to a likely slowdown in those economies.

Nike was off 3.5 percent, FedEx down less than 1 percent and Tiffany was off 1.5 percent.

American consumers, who drive two-thirds of the economy, are spending more in stores and restaurants. But investors are worried about how long that will last if oil prices continue to rise.

Darden Restaurants, which operates Olive Garden and Red Lobster, beat Wall Street forecasts with a 8.5 percent increase in profits after warm weather brought more people to its restaurants. Darden fell 2 percent.

Crude oil rose 1.4 percent after a brief downturn Thursday. Gasoline has risen 59 cents per gallon since Jan. 1 and the average price nationwide is above $4 in at least eight states, plus the District of Columbia.

And then there is China and Europe. New surveys showed a contraction in the manufacturing sector in China, a bellwether for world demand as it produces and exports a huge amount of consumer goods, and one of the world's largest mining companies expects reduced demand there. In Europe, Ireland dipped back into recession.

The dollar fell against the euro and the yen. Treasury prices and gold rose. The yield on the benchmark 10-year Treasury note fell to 2.24 percent.

In other corporate news:

— Micron Technology fell 4 percent, one of the biggest drops in the S&P 500. The maker of computer chips and flash memory reported a larger loss than analysts expected after the market closed Thursday.

—Fertilizer maker Mosaic Co. was up 1.6 percent after JPMorgan analysts upgraded the stock for securing new contracts.

— Morgan Stanley stock moved up 4 percent, after a Credit Suisse analyst upgraded its stock on an improved outlook for its investment banking business.