Stocks ended sharply lower Friday on record high oil prices and a manufacturing report indicating increasing prices that reignited inflation fears.
The Dow Jones Industrial Average fell 99.46, or 1 percent, to close at 10,404.30. The Standard & Poor's 500 Index was down 7.67, or 0.7 percent, at 1,172.92. The Nasdaq Composite Index dropped 14.42, or 0.7 percent, to 1,984.81.
After climbing as high as $57.70 a barrel, a new intraday high, light, sweet crude for May delivery settled at $57.27 a barrel on the New York Mercantile Exchange, an increase of $1.87. The surge came a day after a report issued by Goldman Sachs, a big trader of energy derivatives, said oil prices could spike as high as $105 a barrel.
Meanwhile, the manufacturing sector grew in March for the 22nd consecutive month at a slightly slower pace than in February but more than what analysts had expected stirring inflation fears. The Institute for Supply Management said Friday that its index measuring manufacturing activity registered 55.2 in March, down from February's 55.3 reading. Analysts had projected the index would hit 55.0. The institute's manufacturing prices-paid index climbed to 73.0 in March from 65.5 in February.
Among local companies, shares of Nara Bancorp Inc. gained 5.7 percent to close at $14.85 after the L.A.-based commercial bank's stock was upgraded twice and one day after it plunged more than $3 a share. Its stock was raised to "buy" from "neutral" by analyst Brett D. Rabatin at FTN MidWest Research and to "buy" from "hold" by analyst Joseph Gladue at Cohen Bros. & Co. On Thursday, the stock lost nearly 19 percent of its value after it was downgraded twice including once by Gladue amid news that the company would restate its 2002 financial results and wouldn't file its 2004 annual report Form 10-K on time.
Staar Surgical Co. rose 4.9 percent to $4.10 after the Monrovia-based ophthalmic product provider said it would sell 4.1 million newly issued shares to institutional investors for $3.50 per share. The transaction will close on or around April 5. The placement agent for the transaction was Pacific Growth Equities LLC. There had been fears the company might run out of cash after new product offerings were held up by regulatory troubles.
On the down side, shares of Tag-It Pacific, Inc. fell 21.15 percent as the L.A.-based apparel company reported after Thursday's closing bell a fourth-quarter net loss of $17.4 million (96 cents per diluted share), compared with a loss of $6 million (52 cents) for the like period a year earlier. Revenue for the quarter rose 1 percent to $13 million.
And International Rectifier Corp. lost 2.9 percent to $44.20 after the El Segundo-based semiconductor manufacturer was downgraded to "above average" from "buy" by analyst Richard L Whittington at Caris & Company.
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