Inflation Concerns Don't Deter Investors

The markets finished the week on a mostly positive note despite worries about the upcoming Fed meeting that's likely to produce a boost in interest rates.
Neither concerns about inflation nor mounting trade deficits could keep stocks from pushing upward on Friday. However, the key indexes ended the week mixed as investors continue to worry about the Federal Reserve's pending decision on interest rates.

The Fed will meet June 29, and it's expected to raise the benchmark interest rate by at least 0.25%. A rate hike of 0.5% could take place if economic data before the meeting show further signs of inflationary pressure.

The Information Week 100 was down 2.19 points, or 0.7%, to 310.29. The other major indexes were all slightly higher: The Dow Jones industrial average rose 38.89, or 0.4% percent, to 10,416.41. The Standard & Poor's 500 index rose 2.95, or 0.3%, to 1,135.00, and the Nasdaq composite index rose 3.06, or 0.2%, to 1,986.73. The Nasdaq 100 tracking stock was up 5 cents to $36.44 as just over 109 million shares changed hands.

For the week, the Dow rose 0.1%, while the Nasdaq fell 0.7% and the S&P 500 fell 0.1%, while the InformationWeek 100 was the big loser, falling 2.8%. It was the fourth straight week of gains for the Dow, while the S&P 500 fell after three up weeks. The Nasdaq reversed a single week of gains.

Among tech stocks, Red Hat fell plunged $2.29 to $20.10 one day after the Linux software distributor announced earnings that were in line with analysts' expectations. However, the company's earnings guidance for future quarters was disappointing to many investors, and First Albany cut Red Hat's investment rating to neutral.

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Brian T. Horowitz, Contributing Reporter
Samuel Greengard, Contributing Reporter
Nathan Eddy, Freelance Writer
Brandon Taylor, Digital Editorial Program Manager
Jessica Davis, Senior Editor
Cynthia Harvey, Freelance Journalist, InformationWeek
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing