Another Down Week for Stocks

Stocks snapped back from an early plunge to finish mixed Friday, but major U.S. indexes still ended lower for a fourth straight week as a car bombing in Pakistan and another round of bad news about the economy and corporate earnings rattled investors and kept a lid on the day’s gains.

The Dow Jones industrial average recovered from an early 241-point drop to close down 28.59 points, or 0.3%, at 9,474.21, and the broader Standard & Poor’s 500 index fell 2.29 points, or 0.2%, to 1,007.27.

The technology-heavy Nasdaq composite index climbed 7.88 points, or 0.5%, to 1,504.74, as bargain hunters swooped in. Early on, the index was down 51 points.

Losers edged winners by 6 to 5 on the New York Stock Exchange; advancing and declining shares were about even on Nasdaq. Trading was heavy.

For the week, the Dow slid 1.2%, the S&P; 500 fell 2% and Nasdaq lost 2%. In four weeks the indexes have sunk 8.5%, 9% and 13.6%, respectively.

“We’ve had a steady rainstorm of bad news, and the rain has gotten heavier in the past six to eight weeks,” said Dennis Ferro, chief investment officer at Evergreen Investments in Charlotte, N.C. “Between earnings, quality of earnings and corporate governance issues, there’s not a huge amount of sunshine out there.”

Indexes plummeted in the morning after a bombing outside a U.S. government office in Pakistan left 11 dead and many others injured, prompting fears of further terrorist strikes.

The University of Michigan’s index of U.S. consumer sentiment in early June provided an economic jolt, as the reading showed a surprisingly steep drop from the month before.

What’s more, Sprint cut its sales forecast and brokerage analysts raced to downgrade the wireless phone sector.

The S&P; 500 and Nasdaq are near their Sept. 21 lows of 965.80 and 1,423.19, respectively, reached in the wake of the terrorist attacks. At its low point Friday, the S&P; 500--the market’s primary benchmark--was within 16 points of its Sept 21 close.

Still, at least one analyst is hopeful that the market’s recent troubles are ending and that the major indexes won’t fall meaningfully below their September lows.

“The market would need more bad news geopolitically or economically to break through those lows, and I don’t see that as a high likelihood,” said John Forelli, portfolio manager at Independence Investments in Boston.

Could Friday’s late advance set the stage for a market recovery? Analysts are dubious, saying the market could be stuck in a modest “trading range” until the earnings picture comes into better focus.

“If we get a reasonable set of second-quarter earnings numbers and the economic indicators look good, that could set the stage for a summer rally,” said Ferro of Evergreen Investments.

One challenge in trying to pinpoint the market’s nadir is that “there’s no unanimity to this market,” said Paul Rabbitt, head of Rabbitt Analytics in Hermosa Beach.

He noted that the Dow, which has a relatively low weighting of tech stocks, and the Russell 2,000 index of smaller stocks have held up better and remain further from their September lows.

The dollar, meanwhile, fell to a 17-month low against the euro, while bond yields fell on the weak economic news. The yield on the benchmark 10-year Treasury note slid from 4.90% on Thursday to 4.80%--its lowest since Dec. 4.

Among Friday’s highlights:

* On Nasdaq, hard-hit ImClone Systems was among the day’s big gainers, along with software leader Microsoft and biotech giant Amgen. ImClone gained 71 cents to $8.79, Microsoft advanced $1.03 to $55.25--once again passing General Electric as the biggest U.S. company by market value--and Amgen rose $2.38 to $40.18, part of a broad biotech rally.

Immunex, which Amgen is acquiring, surged 94 cents to $21.72 on a strong progress report for its arthritis drug Enbrel.

* Among blue-chip names, Home Depot fell 92 cents to $36.98 as traders reacted to the consumer confidence report, but American International Group gained $1.62 to $64.46 after a Lehman Bros. analyst called the insurance giant a “compelling” bargain.

* TRW, facing a takeover bid by Northrop Grumman, fell 52 cents to $54.38 after saying it expects profit to exceed Wall Street’s estimates this year because of rising sales in its automotive unit. Northrop was off $1.17 to $122.13.

* Stocks finished sharply lower in Europe, where most markets closed before the rebound in the U.S. Among major bourses, Germany fell 3.7%, Britain was down 3% and France was off 2.9%.

Market Roundup, C4-5