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Investors were torn between worries about weaker than expected durable-goods orders and an attempted attack on a Saudi oil refinery on the one hand — and a desire to take advantage of investment opportunities on the other hand. The Nasdaq rose and the broader market managed to stabilize after crude oil prices jumped 4% and a number of companies issued disappointing earnings outlooks.

Today, the Dow Jones industrial average closed down 7.37 to 11,061.85, the Standard & Poor’s 500 index closed up 1.64 or 0.1% to 1,289.43, and the Nasdaq composite index closed up 7.72 or 0.3% to 2,287.04. For the week the Dow Jones Industrials fell 0.5% while the S&P 500 and Nasdaq Composite both gained 0.2%.

Market breadth was positive. On the New York Stock Exchange, winners beat losers 19 to 12 as 1.43 billion shares changed hands. On the Nasdaq, advancers topped decliners by nearly 17 to 12 on volume of nearly 1.57 billion shares.

The good sign is that despite higher oil prices, the market ended the week on a positive and this positive momentum could likely continue into early next week. The next week is jammed with economic news such as reads on consumer confidence, new and existing home sales and manufacturing. Market participants seem to be counting on another quarter-point interest rate hike at the next Federal Reserve policy meeting. However, they remain confused about what will happen at the May meeting and when the Fed’s rate-hiking campaign will end. Particularly strong or weak economic news next week could help provide hints.

It is evident that there are many cross currents in the market. Higher oil prices, and an economy that is doing fine which is leading the market to have difficulty in getting outside its trading range in the near term and probably will require an outside event to break out. There continues to be strong buying interest in many individual shares, but there also are significant money flows into mutual funds that short the overall market.

The Commerce Department reported a 10.2% plunge in durable-goods orders for last month, citing weak aircraft orders. This decline, the largest since July 2000, far exceeded the 2.5% drop expected by economists. Aircraft orders fell 68.2% in January after averaging more than three times the normal level from October through December.

Home builders are also growing concerned about an increasing number of cancelled new home orders, which could be a sign of an underlying weakness in the recent run in home prices. This could be the last warning sign that buyers who were turning to real estate as an investment, rather than for their own housing needs, are shifting out of real estate.

Amongst the gainers today, Research in Motion closed up $4.52 or 6.5% to $74.05, after a judge hearing arguments in a patent case opted not to immediately shut down the company’s popular BlackBerry e-mail service, as had been feared. eBay closed up $0.26 to $41.49, Cisco Systems gained $0.13 to $19.85, and JDS Uniphase closed up $0.08 to $3.06.

Amongst losers, GM closed down $0.60 to $19.99, Hewlett Packard closed down $0.35 to $32.02, AT&T closed down $0.37 to $27.57, Dana lost $1.64 or 52% to $1.51, Merge Technologies closed down $4.00 or 21% to $20.50, Gap lost $0.67 or 3.5% to $18.43, Nordstorm closed down $1.72 to $38.30, and H&R Block lost $2.18 or 8.7% to $23.01,after reporting lower quarterly earnings that missed estimates.

U.S. light crude oil for April delivery jumped $2.37 or roughly 3% to settle at $62.91 a barrel on the New York Mercantile Exchange, following reports that suicide bombers had tried to blow up a Saudi oil refinery. The attack was thwarted at the gates of the refinery. Nonetheless, concerns about global supply remained, following unrest and threats to oil supplies in Nigeria and Iran in recent weeks.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter