Pre-Labor Day gains boosted by technology

NEW YORK -- Tech stocks achieved their seventh straight monthly advance and blue chips their sixth Friday in an otherwise unremarkable pre-Labor Day session. Trading was extremely light.\nAfter fluctuating in the early going, the market by Friday afternoon achieved moderate gains. The atmosphere was dull despite encouraging reports on consumer spending and the manufacturing sector.\nThe Dow Jones industrial average closed up 41.61, or 0.4 percent, at 9,415.82. For the week, the Dow gained 0.7 percent.\nThe Nasdaq composite index rose 10.27, or 0.6 percent, to 1,810.45. The Standard & Poor's 500 index advanced 5.17, or 0.5 percent, to 1,008.01. For the week, the Nasdaq climbed 2.6 percent and the S&P gained 1.5 percent.\nWhile trading was slow throughout August as traders were away on summer vacations, the major indexes easily ended the month higher. The Dow and S&P posted their sixth straight winning month, while the Nasdaq had its seventh consecutive monthly gain.\nIt was the fourth straight winning week for the Dow and the third for the Nasdaq, S&P and Russell 200 index.\nMarket observers were encouraged that Wall Street was able to advance again, this time in the doldrums of August.\n"This is potentially good news ... because if we now see the top of the range begin to act as support, we increase the chance of breaking out to the top side as traders return to the market," said Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research in Cincinnati.\nThere was a lot of economic news Friday, most of it positive.\nFederal Reserve Chairman Alan Greenspan sought to reassure the market that the Fed aimed to guard against even remote risk of deflation.\nIn a speech in Jackson, Wyo., Greenspan defended the Fed's recent worries about deflation, which caused some volatility on Wall Street. He said it was sometimes necessary for the Fed in its interest rate policy to take out an insurance policy "against the emergence of especially adverse outcomes."\nBefore the market opened, the Commerce Department reported consumers boosted their spending 0.8 percent in July as the latest tax cut left people with extra cash.\nThe increase in spending last month was the largest since March and followed a sizable 0.6 percent advance in June. July's spending figure matched economists' expectations. Consumer spending accounts for two-thirds of the U.S. economy.\nLater, the Purchasing Management Association of Chicago said its index of area business activity rose to 58.9 in August on a seasonally adjusted basis from 55.9 in July. It was the fourth straight month that the business barometer signaled expansion. It is considered a harbinger of the Institute for Supply Management's index, to be released today.\nBut the University of Michigan's report on consumer confidence indicated a slight drop in August from July, according to Dow Jones Newswires.\nLynn Reaser, chief economist and senior market strategist, Banc of America Capital Management, noted that "overall, this has been a quiet week -- but a positive week for economic news."\nShe said the increase in the Chicago index "suggests that improvement on the consumer side is feeding into the industrial sector," which should result in stronger overall growth.\nThe Goodyear Tire & Rubber Co. rose 50 cents to $7.12 after the company announced Thursday it will eliminate about 500 jobs at its North American tire operations as part of continuing cost-cutting measures.\nStarbucks Corp. advanced 75 cents to $28.39 after reporting a 9 percent increase in same-store sales in August.\nPeoplesoft rose 35 cents to $18.05 after brokerage house Robert W. Baird upgraded it to "outperform" from "neutral."\nThe last time the Dow had six or more straight monthly gains was an eight-month run from December 1994 through July 1995. The S&P last had a six-month rally from January through June 1996, and the last time the tech-dominated Nasdaq had a streak as long was the 10-month period that ran from December 1994 through September 1995.\nAdvancing issues outnumbered decliners more than 2 to 1 on the New York Stock Exchange. Consolidated volume was light at 1.27 billion shares, below 1.49 billion Thursday.\nThe Russell 2000 index, which tracks smaller company stocks, rose 1.61, or 0.3 percent, at 497.42. The Russell had a weekly gain of 2.5 percent.\nOverseas, Japan's Nikkei stock average finished Friday up 1.16 percent. In Europe, France's CAC-40 fell 0.4 percent, Britain's FTSE 100 forfeited 0.9 percent and Germany's DAX index declined 0.2 percent.