KEEPING SCORE: The Dow Jones industrial average fell 17 points, or 0.1 percent, to 18,268 as of 3:04 p.m. Eastern time. The Standard & Poor's 500 lost less than a point to 2,130 The Nasdaq rose five points, or 0.1 percent, to 5,092. OIL DROP: The price of oil fell $1, or 1.6 percent, to close at $59.72 a barrel, helping push down the stocks of drillers and other energy-related companies. Hess Corp. lost 1 percent.
RISING PRICES: U.S. consumer prices rose slightly in April for the third straight month, suggesting that an improving economy could be setting the stage for the Federal Reserve to raise the benchmark short-term interest rate from the near-zero level where it has been for more than six years. Consumer prices edged up 0.1 percent from the previous month.
Core inflation, which excludes volatile food and energy prices, climbed 0.3 percent, the biggest one-month increase since January 2013. Over the past three months, core inflation has risen at fastest annual pace in four years.
THE QUOTE: "We don't think inflation is really a problem," said Jim McDonald, chief investment strategist at Northern Trust. "But the uptick is a cover for the Fed to do what it wants to do anyway: Get off zero rates."
YELLEN COMMENTS: In a speech in Rhode Island, Federal Reserve Chair Janet Yellen said she expects the Fed to begin raising interest rates later this year if the job market improves. But she cautioned that the economy is still facing headwinds, like disappointing wage growth and too many people working part time.
LEAPING DEERE: Deere & Co. rose $3.89, or 3.8 percent, to $93.35 after the equipment maker beat analysts' estimate for its latest quarterly earnings. Strong sales in construction equipment offset a global agricultural slowdown. The company also raised its profit forecast for the year. SOUP SURGE: Campbell Soup rose 84 cents, or nearly 2 percent, to $47.77 after reporting better-than-expected results, too.
RETAILER WOES: Gap Inc. fell 48 cents, or 1.2 percent, to $38.09 after reporting late Thursday that first-quarter earnings plunged 8 percent as the company tries to turn around its Banana Republic and Gap chains. The company also cited a surge in the value of the dollar. That has made sales abroad worth less when translated back to the U.S. currency.
TIRED BULL? Stock markets are hitting record after record, but the moves up are tiny and investors don't seem enthusiastic. "It continues to be the rally that no one respects," said JJ Kinahan, chief strategist at TD Ameritrade.
"But the despite headwinds, it continues to plug along." Another sign of the sleepy mood lately: The VIX, a sort of fear index tracking expectations of future stock moves, hit its lowest level Friday since the start of the year.
CHINA RISING: The Shanghai Composite Index jumped 2.8 percent to close at 4,657.60, the highest level since 2008. Investors are betting that the economic stimulus that has powered the rally will continue after several poor indicators, including a disappointing manufacturing index on Thursday.
EUROPE, ASIA: France's CAC 40 fell 0.1 percent and Germany's DAX slipped 0.4 percent. Britain's FTSE 100 rose 0.3 percent. In Asia, Japan's Nikkei 225 index added 0.3 percent and South Korea's Kospi rose 1.1 percent.
Hong Kong's Hang Seng climbed 1.7 percent. BONDS: The rise in consumer prices sent U.S. bond prices lower. The yield on the benchmark 10-year Treasury note rose to 2.21 percent from 2.19 percent late Thursday.
CURRENCIES: The dollar rose to 121.53 yen from 121.05 yen. The euro fell slightly to $1.1013 from $1.1110. METALS: Precious and industrial metals futures closed little changed. Gold edged down 10 cents to $1,204 an ounce, silver rose two cents to $17.13 an ounce, and copper fell four cents to $2.81 a pound.
finance.yahoo.com
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