Stocks fall for week as Japan weighs on markets

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By Ken Sweet, contributing writerMarch 18, 2011: 4:46 PM ET

NEW YORK (CNNMoney) -- U.S. stocks rose for a second day in a row on Friday, as news of a cease-fire in Libya eased traders' concerns about developments in the Middle East. However, the ongoing turmoil in Japan led U.S. stocks to fall for the week.

The Dow Jones industrial average (INDU) climbed 84 points, or 0.7%, to 11,859; the S&P 500 (SPX) added 5.5 points, or 0.4%, to 1,279; and the Nasdaq Composite (COMP) rose 7.6 points, or 0.3%, to 2,644.

For the week, the Dow fell 1.5%, the S&P 500 lost 1.9% and the Nasdaq dropped 2.7%. While the Dow and S&P 500 remain modestly higher for the year, this week's declines have now put the Nasdaq down 0.4% year-to-date.

Stocks were higher throughout Friday's trading session as investors welcomed two pieces of encouraging news: Libya's cease-fire and the G7's Japanese yen intervention plan.

The financial sector kept the momentum going, after the Federal Reserve gave the green light for several big banks to raise dividends and buy back shares. Among the firms to announce dividend hikes were JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500) and USBancorp (USB, Fortune 500), which each saw their shares climb.

The Libyan government announced an immediate cease-fire after the United Nations voted to impose a no-fly zone over the country. However, witnesses in the besieged city of Misrata told CNN a fierce pro-government assault was persisting.

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Oil prices, which had ticked higher on the U.N. vote, turned lower after the cease-fire announcement. Crude prices fell 25 cents to $101.15 a barrel. Earlier in the session, prices neared $104.

And while Japan continues to struggle with its nuclear power plants, the Group of Seven major economic powers announced a coordinatedintervention to prevent the Japanese yen from rising further. The announcement helped the yen ease and boosted the Nikkei 2.7%.

"It's good to see leaders acting to provide stabilization in the currency market -- it gives the market confidence," said Anthony Conroy, head trader with BNY ConvergEx.

The Japanese yen had been driven sharply higher in recent days by global uncertainty and the prospect of more cash flowing into Japan.

Why the yen needs to be restrained

Because Japan is heavily reliant on exports to drive its economy, a strong yen would put a difficult headwind against what is already a struggling economy, said Bill Stone, chief investment strategist with PNC Financial.

"A little weakness in the yen would be a good thing," Stone said.

U.S. stocks closed broadly higher Thursday, rebounding after two days of sharp declines.

World markets: European stocks closed higher. Britain's FTSE-100 added 0.4%, the DAX in Germany notched up 0.1% and France's CAC 40 gained 0.6%.

Aside from the Nikkei, other Asian markets ended higher. The Shanghai Composite rose 0.3% and the Hang Seng in Hong Kong added less than 0.1%.

Companies: Cisco (CSCO, Fortune 500) shares rose 0.8% after the company announced a new 6 cents-a-share dividend.

Nike (NKE, Fortune 500) shares tumbled 9% after the company reported disappointing earnings and said it would raise prices on many of its products because of higher commodity prices.

Celera (CRA) shares soared 34% Friday after Quest Diagnostics (DGX,Fortune 500) announced it would buy Celera for $344 million, or $8 a share.

Shares of tax-software maker Intuit (INTU) rose 3% after the company said that the number of users of its TurboTax software jumped 7% compared to a year ago.

Currencies and commodities: The dollar fell against the euro, but gained versus the British pound.

Gold futures for April delivery rose $11.90, or 0.8%, to trade at $1,416.10 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 3.26% from 3.27% late Thursday.  

Tokyo stocks rebound

By Ben Rooney, staff reporterMarch 15, 2011: 10:11 PM ET

NEW YORK (CNNMoney) -- Stocks in Japan opened higher Wednesday morning, one day after the island nation's main market index suffered one of its biggest drops on record.

The Nikkei 225 index, the most prominent measure of Tokyo market stocks, opened 6% higher but then began sliding. Two hours into trading, the index was up 380 points, or 4.42%.

The rebound comes after intense selling in the previous two sessions. On Tuesday, the index plunged 10.6%, marking the third worst one-day plunge in the Nikkei's history.

Investors in Japan have been stunned by the devastation caused by last week's earthquake and tsunami, including an increasingly dire situation at the Fukushima Daiichi nuclear power plant.

A second fire was discovered Wednesday at the stricken nuclear facility located about 138 miles north of Tokyo. A handful of workers have been struggling to contain a dangerous radiation threat there following three explosions and another fire on Tuesday.

The plant was crippled after a 9.0-earthquake, the fifth-largest worldwide since records began, struck off Japan's coast on March 11. Within an hour, a wall of water measuring up to 30 feet high swept across the Japanese coast, destroying entire towns and villages in its path.

The death toll has risen to 3,373, according to Japan's National Police Agency. At least 7,558 people were still missing as of Wednesday morning, and 1,990 were injured.

Economists say it is too soon to accurately estimate the financial toll of the disaster, but one expert said Tuesday that losses could exceed the record $125 billion that Hurricane Katrina caused in 2005.

In a statement, Atsushi Saito, the chief executive of the Tokyo Stock Exchange Group, attributed the selling to worries about "the degradation of social infrastructure" and the damaged nuclear power plant.

But he said Japan's experience recovering from past earthquakes "should not be underestimated" and that he believes "the stock market will calm down soon."

"I believe that the Tokyo Stock Exchange in its role as an important social infrastructure should continue to provide opportunities for stock trading," he added. "I would appreciate it if all investors and trading participants would respond in a calm and orderly manner."

Elsewhere in Asia, markets opened higher. Hong Kong's Hang Seng index gained 0.61% while China's Shanghai Composite advanced 0.28%.

Meanwhile, stocks in the United States recovered some ground late Tuesday but ended sharply lower as investors looked past a somewhat positive statement from the Federal Reserve to focus on events in Japan.