NEW YORK (AFX) - Stocks drooped in early trading Friday as investors collected profits from Thursday's rally, which gave the major indexes their largest one-day point gains in more than three years.
The decline followed a pattern set on Wall Street over the last two months, with a strong opening withering quickly. Investors were eager to lock in gains from the rally that sent the Dow Jones industrial average up more than 200 points.
In morning trading, the Dow fell 3.68, or 0.03 percent, to 11,187.12. On Thursday, the Dow surged 217.24, or 1.98 percent, to 11,190.80, its biggest single-day jump since March 21, 2003, when it added 235.37 points.
Broader stock indicators also fell Friday. The Standard & Poor's 500 index fell 0.76, or 0.06 percent, to 1,272.11, after gaining 26.87, or 2.16 percent, to close at 1,272.87, its largest point gain since March 17, 2003.
The Nasdaq composite index fell 7.09, or 0.33 percent, to 2,167.29 after gaining 62.54, or 2.96 percent, to close at 2,174.38, its largest point gain since July 27, 2002.
Advancers led decliners by roughly 4 to 3 on the New York Stock Exchange.
Bonds rose, with the yield on the 10-year Treasury at 5.19 percent, down from 5.20 percent Thursday. The U.S. dollar was down against other major currencies in European trading. Gold prices were higher.
Crude oil futures rose. A barrel of light crude was quoted at $73.60, up 8 cents, in trading on the New York Mercantile Exchange.
The day's economic data was, on balance, positive. The government said inflation, as measured by a price gauge tied to consumer spending, rose by 0.4 percent in May and was up 0.2 percent when energy and food prices are excluded. This measure of core inflation is up 2.1 percent when compared to May 2005, slightly above the Fed's upper bounds for core inflation of 2 percent.
The University of Michigan's June consumer sentiment reading came in better than expected, but the government reported that consumer spending slowed sharply in May as rising gasoline prices left Americans with less to spend on other items. The Commerce Department said spending rose by just 0.4 percent last month after a 0.7 percent gain in April. Income growth also slowed to an advance of just 0.4 percent last month, reflecting weaker job growth.
In company news, General Motors Corp. rose $1.57 to $29.01 after major holder Tracinda Corp. asked the auto maker to explore joining an alliance with France's Renault and its sister company, Japan's Nissan Motor Co. Ltd.
Apple Computer Inc. fell $2.20 to $56.77 after the company said late Thursday that an internal investigation discovered irregularities related to the issuance of certain stock-option grants made between 1997 and 2001, including one -- later canceled -- to CEO Steve Jobs.
Volume on the New York Stock Exchange was 279.24 million, up from 183.11 million Thursday.
The Russell 2000 index of smaller companies fell 2.41 points, or 0.34, to 711.91.
Overseas, Japan's Nikkei stock average rose 2.54 percent. In afternoon trading, Britain's FTSE 100 was up 0.70 percent, Germany's DAX index was up 1.40 percent, and France's CAC-40 was up 1.12 percent.
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