FILE - In this Feb. 8, 2012 photo, traders Mario Innella, left, and Anthony Riccio work on the floor of the New York Stock Exchange. Stock markets advanced Friday, Feb. 17, on hopes that Greece would soon get its crucial second bailout and following another batch of upbeat U.S. economic news. (AP Photo/Richard Drew, File)
Updated: February 17, 2012 11:20AM
NEW YORK — The stock market struggled for direction Friday as Greek debt talks idled and U.S. inflation came in at expected levels.
The Dow Jones industrial average rose as much as 49 points in early trading before giving up some of those gains. It was up 19 points to 12,923 at noon.
It was a quiet session compared to Thursday, when the Dow soared 123 points to close at its highest level so far this year, 12,904. That also puts the Dow tantalizing close to the 13,000 mark, a milestone it hasn’t reached since May 2008, four months before Lehman Brothers, Merrill Lynch and Wachovia teetered near collapse in the worst phase of the financial crisis.
The broader Standard & Poor’s 500 and the Nasdaq composite also closed at their highest levels of the year on Thursday, but Friday brought divergent fortunes. The S&P 500 was up 1 point at 1,359. The Nasdaq composite fell 12 to 2,948.
“Today is just waiting to see what’s next,” said Sanjeev Bhojraj, an accounting professor at Cornell’s Johnson business school. “You don’t know which way to go — you’re hoping the news will help you figure it out.”
The market has been yanked back and forth this year by vague, daily headlines out of Greece, which is trying to secure rescue loans from other European countries to keep from defaulting on debt due next month. In the 32 trading days of 2012 to date, the Dow has risen on 18 and fallen on 14.
For the most part, though, the market has seemed determined to move higher, despite questions about whether improving economic fundamentals are underlying the rally or whether it’s just driven by emotion. The Dow is up 6 percent this year after rising 5.5 percent in all of last year.
The yield on the benchmark 10-year Treasury note rose to 2.02 percent from 1.99 percent late Thursday. That’s a sign that investors are moving money out of safe-haven government bonds and into riskier investments like stocks.
All the major European indexes rose, including Greece’s ATHEX. The euro rose slightly to $1.31, indicating confidence in Europe.
There were some encouraging signs that Greece will secure its bailout deal next week, by agreeing to enough cost-cutting to persuade the other euro zone countries to sign off on the rescue loans. The finance ministers of the countries that use the euro are meeting Monday to finalize the terms.
A spokesman for German Chancellor Angela Merkel said that she as well as the leaders of Greece and Italy are “optimistic” that a deal can be agreed to next week. France’s Finance Minister Francois Fillon said Europeans must do everything possible to help Greece avoid a default. Their sentiments are important because some politicians in the richer euro zone countries, including Germany and the Netherlands, have complained about footing the bill for Greece.
It’s also difficult to tell how much investors are really being affected by Greece. After months of trading on daily and ever-changing headlines, come investors have grown complacent: They either have faith that Europe will find a way to keep Greece from defaulting, or they believe Greece will default but it won’t make much difference to the rest of Europe.
Consumer prices rose modest 0.2 percent in January, pushed up by higher gas and clothing costs but tempered by falling prices for energy and food. A small amount of inflation can be good for the economy because it encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value.
Among stocks making big moves:
— Campbell Soup rose 3 percent after reporting earnings that beat analysts’ expectations. The company is in the midst of a turnaround plan that includes adding more expensive, higher-quality soups and broadening offerings in its snack, beverage and other categories
— H.J. Heinz rose 5 percent after the ketchup maker reported earnings and revenue that exceeded the forecasts of Wall Street analysts, helped by a massive 40 percent increase in sales in emerging markets like China, Russia and Latin America.
— Gilead Sciences plunged 15 percent after the drugmaker said a promising hepatitis C treatment it recently acquired may have to be used with other drugs in patients with the disease. The Foster City, Calif., company said some patients in a small part of a mid-stage study relapsed within a month of completing the treatment.