Wall Street slumps

Wall Street’s rally lost momentum as profit-taking set in today, leaving stocks narrowly lower but still allowing the Dow Jones industrials and Nasdaq composite index to post weekly gains for the first time since early March.

Investors were initially reassured by the University of Michigan’s consumer sentiment index, which rose to 95.8 in March from 95.4 in February.

The Dow Jones industrial average slipped 5.85, or 0.1%, to 10,212.97, after a 170.59 point gain the previous session.

Broader stock indicators were also modestly lower. The Standard & Poor’s 500 index was down 1.13, or 0.1%, at 1,108.06, and the Nasdaq composite index fell 7.15, or 0.4%, to 1,960.02. Both indexes enjoyed major gains the previous day as well.

For the week, the Dow climbed 26.37, or 0.3% and the Nasdaq rose 19.55, or 1.0%, while the S&P 500 lost 1.71, or 0.2%. The Dow and Nasdaq halted a steep two-week decline, due mostly to Thursday’s gains, while the S&P 500 had its third straight losing week.

The Commerce Department report on consumer income and spending, while not entirely positive, was still good enough to support Michigan’s findings. Consumer income was up 0.4% in February, up from the 0.3% rise reported in January and slightly better than economists expected.

However, consumer spending rose 0.2%, down from the 0.5% gain in January. While less than Wall Street expected, consumer spending still managed to make gains, analysts said, showing that the recent economic troubles have not stopped consumers from making purchases.

The biggest coming indicator, however, is next week’s payroll report, which analysts are hoping will be better than expected.

Etrade Financial Corp. gained 40 cents to 13.10 after the company was added to the S&P 500 index. The online brokerage and banking company was also upgraded to “strong buy” by Raymond James.

Hewlett-Packard has filed a case against rival computer maker Gateway Inc, alleging infringement of six patents covering a variety of personal computer technologies. H-P was down 3 cents at 22.36, while Gateway dropped 14 cents to 5.26.

EchoStar Communications Corp posted earnings that came in 8 cents below analysts’ estimates, as well as lower-than-expected revenue. EchoStar slumped 94 cents to 33.70.

Advancing issues outnumbered decliners by nearly 5 to 4 on the New York Stock Exchange, where volume totalled 1.31 billion shares, compared to 1.48 billion at the same point on Thursday.

The Russell 2000 index of smaller companies rose 1.39, or 0.2%, to 572.92.