NEW YORK - Blue chip stocks rose Friday after a government report indicated inflation appears to be under control, but the big advance led few to believe that Wall Street has suddenly become optimistic about an economic turnaround.
While the gains for well-known companies were a positive sign, analysts warned they were probably no more than a blip. Similar upticks this year have usually been erased within days in the absence of evidence that the economy is headed out of the doldrums.
"While we had hoped for a summer rally, we think the market remains in frustration mode," said Scott Bleier, chief investment strategist at Prime Charter Ltd.
The Dow Jones industrial average rose 117.69 to 10,416.25, rebounding after traders sent it down 101 points earlier in the session. For the week, the Dow finished down 96.53, or 0.9 percent.
Broader stock indicators were mixed. The Standard & Poor's 500 index climbed 6.73 to 1,190.16, and finished the week with a loss of 24.19, or 2 percent.
The Nasdaq composite index was down 6.85 at 1,956.47 and ended the week down 109.86, a loss of 5.3 percent.
Although the inflation report sets the stage for further Federal Reserve interest rate cuts later this year, investors still have pervasive concerns about how long it will take for an economic recovery that would help companies deliver better returns to shareholders.
Investors are locked into a mind-set in which buying enthusiasm is rare, and short-lived when it occurs, said William Barker, investment strategy consultant at Dain Rauscher in Dallas.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange.
US Airways predicts profit loss
ARLINGTON, Va. - US Airways said Friday it expects a loss of $160 million in the third quarter because of reduced spending by business travelers.
The carrier also warned investors about a $405 million pretax charge it will record to reflect the declining market value of its fleet.
The projected loss, which excludes unusual items, translates to $2.38 a share. US Airways lost $30 million, or 45 cents a share, in the third quarter of 2000.
Analysts surveyed by Thomson Financial/First Call had been predicting a loss of $1.16 a share.
The $405 million charge will be taken against its fleet of Fokker 100, Boeing 737-200 and MD-80 jets.
Investors and employees are waiting to see what action US Airways executives will take in light of the company's failure to complete a merger with UAL Corp.'s United Airlines.
Executives have asked the airline's pilots for permission to increase the fleet of regional jets from 70 to 350. The airline has said the smaller aircraft could be used to replace turboprop planes on short routes that are unpopular with travelers. But the pilots' union has resisted those changes, saying the result would be job losses.
Web currency site shuts down
NEW YORK - An online currency promoted as the perfect Internet gift certificate is apparently no longer redeemable.
The New York-based Flooz.com Inc. said Friday it had suspended operations and is seeking a merger partner.
The company sold a "currency" called Flooz, which users bought with hard currency and then were able to spend online by visiting several dozen sites that accepted it, including Barnes&Noble.com and TowerRecords.com.
Those sites and others have removed Flooz payment options, but other sites around the Web still tout Flooz, many displaying banner ads with the smiling face of Whoopi Goldberg, the company spokeswoman hired in an $8 million ad campaign.
Bayer's layoff headaches continue
BERLIN - Germany's Bayer AG confirmed Friday that it will slash an additional 2,700 jobs by 2005, finishing off an abysmal week for the pharmaceutical giant that included the withdrawal of its lucrative anti-cholesterol drug Baycol and a second profit warning in as many months.
News of the layoffs came a day after Bayer said it would cut 1,800 positions and shut 15 plants at its polymers division. The latest round of cutbacks, announced Friday, will be in its drugs unit, where mounting problems are expected to hammer earnings this year and beyond.
Bayer's stock plummeted Wednesday on the news that it was pulling Baycol, its No. 3 selling drug, after it was linked to at least 31 deaths in the United States and nine more in other countries.
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