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 Financials drifted lower on continued worries about the health of balance sheets, while a surge in profits at Juniper Networks Inc. lifted technology stocks.
The Commerce Department reported that orders sent to factories for big-ticket manufactured goods such as cars, appliances and machinery rose by 0.8 percent in June, the strongest gain in four months and well ahead of Wall Street's expectations. But outside demand for defense equipment orders would have been up only modestly.
Another Commerce Department report showed that new home sales dropped by a smaller-than-expected 0.6 percent. While it marked the seventh decline in the past eight months, it stirred some hope that the housing market could be finding a bottom. Investors hit the sell button Thursday after a a weak reading on existing home sales.
And there was good news about consumers, whose shyness about spending has troubled Wall Street because consumer spending accounts for more than two-thirds of U.S. economic activity. The Reuters/University of Michigan index of consumer sentiment for the first part of July came in at 61.2, while economists forecast a reading of 56.4. The report marked a slight rebound from a 28-year-low last month.
Linda Duessel, equity market strategist at Federated Investors, said economic figures such as the durable goods numbers are important because they reveal continued demand from abroad, which could help U.S. companies continue to rake in profits even if the U.S. economy isn't running at full steam.
"That's good news for market participants as we try to find a footing in the market because we really don't want to see our weakness leak outside the U.S.," she said.
The Dow Jones industrial average rose 21.41, or 0.19 percent, to 11,370.69. The Dow, which fluctuated at times Friday, fell more than 280 points Thursday.
Broader stock indicators also rose. The Standard & Poor's 500 index advanced 5.22, or 0.42 percent, to 1,257.76, and the technology-heavy Nasdaq composite index jumped 30.42, or 1.33 percent, to 2,310.53.
For the week, the Dow fell 1.09 percent and the S&P 500 lost 0.23 percent. Friday's tech rally left the Nasdaq up 1.22 percent for the week.
Bond prices moved lower as investors shifted back into stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.10 percent from 4.00 percent from late Thursday.
The dollar was mixed against other major currencies, while gold prices rose.
A barrel of light sweet crude fell $2.23 to settle at $123.26 on the New York Mercantile Exchange. Oil prices have fallen more than $20 in recent weeks, alleviating some of Wall Street's concerns about the effect of inflation consumers' ability to spend.
The stock market's volatility during the week - rallying Tuesday and Wednesday only to erase those gains Thursday
- illustrates tentativeness behind some of the bets investors are laying, said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. He said the market tends to react to whatever the latest headlines are.
"It's just news sensitive and the real question is 'What's the next news going to be? Good or bad?' That means that the market doesn't have a trend or a direction. It depends entirely on whether the news is going to be good or bad on any given day and that doesn't give you, as an investor, a lot of confidence," he said.
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 Johnson said the ride for investors will likely remain uneven as Wall Street awaits next Friday's government employment report for July.
"If the consensus is correct they'll have little choice but to leave interest rates unchanged," he said referring to the difficulties Federal Reserve policymakers would have in hiking rates to battle inflation without damaging the economy.
Many financial stocks fell again Friday as investors worried about the health of their balance sheets given the weakness in the housing sector. Bank of America Corp. fell $1.06, or 3.5 percent, to $29.58, while Wachovia Corp. fell $1.19, or 7.6 percent, to $14.50.
In corporate news, Juniper Networks, the maker of networking equipment, reported a 40 percent increase in earnings for the second quarter, helped by a new product line. The stock surged $4, or 18 percent, to $26.57.
Fannie Mae and Freddie Mac declined after credit ratings agency Standard & Poor's put the risk-to-government, subordinated debt and preferred stock ratings of the government-chartered mortgage companies on watch for possible downgrade. Fannie Mae fell 47 cents, or 3.9 percent, to $11.55, while Freddie Mac fell 54 cents, or 6.1 percent, to $8.27.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where consolidated volume came to 4.55 billion shares, compared with 5.98 billion shares traded Thursday.
The Russell 2000 index of smaller companies rose 7.95, or 1.13 percent, to 710.34.
Overseas, Japan's Nikkei stock average fell 1.97 percent. Britain's FTSE 100 fell 0.18 percent, Germany's DAX index slipped 0.06 percent, and France's CAC-40 advanced 0.67 percent.
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The Dow Jones industrial average ended the week down 125.88, or 1.09 percent, at 11,370.69. The Standard & Poor's 500 index finished down 2.92, or 0.23 percent, at 1,257.76. The Nasdaq composite index ended the week up 27.75, or 1.22 percent, at 2,310.53.
The Russell 2000 index finished the week up 17.26, or 2.49 percent, at 710.34.
The Dow Jones Wilshire 5000 Composite Index - a free-float weighted index that measures 5,000 U.S. based companies
- ended Friday at 12,837.10, down 6.41 points, or 0.05 percent, for the week. A year ago, the index was at 14,710.78.
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On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
[Associated Press; By TIM PARADIS]
Copyright 2008 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
redistributed.
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