Stocks edge lower; slight weekly gain

Rumors of deal between AT&T, Time Warner a drag on telecom shares

— David Schiegoleit, managing director of investments at U.S. Bank “We’re seeing a lot better earnings come out of the financial sector in particular, and some good earnings come out of technology.”

The major U.S. stock indexes closed mostly lower Friday, capping a day spent wavering between small gains and losses.

Phone companies were the biggest drag on the market following reports that AT&T was considering a deal to acquire media conglomerate Time Warner. AT&T, Verizon, Sprint and T-Mobile US all fell.

Health care and energy stocks also took some losses, while consumer staples and technology companies held on to slight gains.

Investors continued to focus on corporate America, reviewing earnings from General Electric, McDonald’s and other big companies. Earnings from banks and other financial companies have been mostly better than anticipated, which has helped boost that sector.

“We’re seeing a lot better earnings come out of the financial sector in particular, and some good earnings come out of technology,” said David Schiegoleit, managing director of investments at the Private Client Reserve at U.S. Bank. “That is reflected in some of the sector performance, but when you look at the market overall we’re still being weighed down by energy.”

The Dow Jones industrial average fell 16.64 points, or 0.1 percent, to 18,145.71. The Standard & Poor’s 500 index slipped 0.18 points, or 0.01 percent, to 2,141.16. The Nasdaq composite index gained 15.57 points, or 0.3 percent, to 5,257.40.

The three indexes ended slightly higher for the week. The Dow is now up 4.1 percent for the year, while the S&P 500 is up 4.8 percent. The Nasdaq is up 5 percent.

Roughly two weeks into the third-quarter financial reporting period, earnings for companies in the S&P 500 are projected to be down about 0.8 percent overall from a year ago, according to S&P Global Market Intelligence. That forecast is largely due to the energy sector, which has been hard hit by falling energy prices.

Several companies that reported results Friday failed to impress investors.

General Electric slipped 9 cents to $28.98 after the company said its latest quarterly sales fell more than anticipated due to weaker results from its lighting and transportation businesses. The industrial conglomerate also trimmed its revenue forecast for the year.

Skechers U.S.A. slumped 17.3 percent after the footwear maker reported disappointing results for the second quarter in a row. The stock fell $3.96 to $18.98.

Others companies fared better.

McDonald’s rose 33 percent after the world’s biggest hamburger chain served up earnings and revenue that exceeded Wall Street’s expectations. The stock added $3.36 to $113.93.

Microsoft climbed 4.2 percent a day after the software giant posted a surprisingly high profit for its fiscal first quarter.

The results help validate the company’s increased focus on software and online services. The stock gained $2.41 to $59.66, eclipsing its previous record close of $59.56 set in December 1999.

News and corporate deal talk also fueled big moves on Wall Street Friday.

AT&T fell 3 percent following reports that the company was considering a deal to acquire the media conglomerate Time Warner. AT&T slid $1.16 to $37.49.