Dow closes up, posts first weekly gain in nearly a month

NEW YORK-- The Dow Jones industrial average has logged its first winning week in a month.

The Dow rose 39 points Friday and ended the week with a gain of 2.8 percent. The market slid in morning trading on disappointing retail sales numbers but pared its losses after a report found consumers are gaining confidence in the economy.

Treasury prices climbed, pushing down interest rates, after spiking on Thursday.

The Reuters/University of Michigan consumer sentiment index showed consumer confidence grew to its highest level since January 2008 and came in well ahead of forecasts. The jump in confidence was an encouraging sign, but still doesn't signal the all-clear for the economy, said Michael Sheldon, chief market strategist at RDM Financial Group in Westport, Conn.

"We recovered some lost ground, but there is still some ways to go," Sheldon said. That was evident in the disappointing retail sales report, which initially sent stocks sharply lower at the open.

The government reported that retail sales fell 1.2 percent in May. It was the first drop in eight months. It was a surprise to economists who had predicted the pace of growth would slow between April and May, but still rise.

Companies dependent on consumer spending fell after the disappointing sales report. Proctor & Gamble Co., which makes Tide detergent and Gillette razors, lost 1.5 percent. J.C.Penney Co. fell 1.1 percent, while Macy's Inc. shares also slipped.

The mixed reports come a day after stocks surged on upbeat global economic figures. The day's swings extended the volatility that has been seen in recent weeks. The Dow climbed 279 points Thursday following reports that the global economy continues to improve.

"The market is nervous," said Joe Heider, principal at Rehmann Financial in Cleveland. "It's reacting on a day-to-day basis."

Heider said the economy is not growing fast enough to overcome the concerns about Europe's debt crisis and other issues such as the oil spill in the Gulf of Mexico. That has led to wild fluctuations in the market, sometimes even within trading days. As it has done for most of the week, the market shifted direction in the final hour of trading Friday.

According to preliminary calculations, the Dow rose 38.54, or 0.4 percent, to 10,211.07. It had fallen 90 points in morning trading.

The Standard & Poor's 500 index rose 4.76, or 0.4 percent, to 1,091.60, while the technology-heavy Nasdaq composite index rose 24.89, or 1.1 percent, to 2,243.60.

For the week, the Dow climbed 2.8 percent, the S&P 500 index rose 2.5 percent and the Nasdaq rose 1.1 percent.