McDonald’s Boosts Blue Chips

Blue-chip stocks ended slightly higher in quiet trading Friday, buoyed by McDonald’s after it reported strong restaurant sales. But weakness in semiconductor stocks sent tech shares to their sixth straight losing session.

Treasury bond yields, which have soared in recent weeks, were little changed, reassuring investors who have been rattled by the turmoil in the fixed-income market.

The bond market firmed this week after the federal government successfully completed its quarterly refunding auction. The 10-year T-note ended Friday at 4.27%, down from 4.38% a week earlier.

In the stock market, “overall sentiment is positive,” said Tim Heekin, director of trading at Thomas Weisel Partners. Investors “are getting comfortable with the bond market sell-off as it indicates the economy is starting to recover.”

On Friday, the Dow Jones industrial average gained 64.64 points, or 0.7%, to 9,191.09. The broader Standard & Poor’s 500 index rose 3.47 points, or 0.4%, to 977.59.

The technology-heavy Nasdaq composite index ended off 8.15 points, or 0.5%, at 1,644.03. It was the third day in a row that the Dow and S&P; 500 gained while Nasdaq fell.

Winners led losers by 5 to 3 on the New York Stock Exchange, while declining stocks held a narrow edge on Nasdaq. Trading was light.

For the week, the Dow edged up 0.4%. But the S&P; 500 slipped 0.3% and Nasdaq gave up 4.2% -- its biggest weekly percentage drop since mid-January.

It was the second down week in a row for both the S&P; 500 and Nasdaq.

A stream of data during the week that showed a rise in productivity and a drop in new jobless-benefit claims helped bolster optimism about the economy -- which gave a boost to many industrial stocks.

Caterpillar jumped $1.05 to $68.21 Friday, Deere leaped $1.38 to $51.18, Eaton gained 75 cents to $83.60 and copper giant Phelps Dodge surged $1.72 to $43.23.

So-called consumer discretionary stocks such as McDonald’s and home improvement retailer Home Depot also were strong.

McDonald’s jumped after it said sales at restaurants open more than one year rose 4.2% in July, the third straight month of increasing sales. Its shares rose $1.83, or 8.3%, to $23.89 and led the Dow’s percentage gains.

Home Depot rallied 76 cents to $32.72 for its third straight gain after a UBS analyst said the retailer may shine even if interest rates rise. Wal-Mart Stores added 77 cents to $57.77 and Target gained 91 cents to $38.91.

Next week, investors will sift through a barrage of economic indicators, including industrial production, consumer confidence and the consumer price index for more details on the recovery’s progress.

Also, Federal Reserve policymakers will meet Tuesday, although analysts see little chance of another interest rate cut at this point.

In other highlights:

* Nvidia rattled technology shares after it warned that its gross margins would be hurt by higher technology costs. It fell $3.80, or 19.7%, to $15.50 and was among Nasdaq’s most active issues. Nvidia’s decline pressured shares of other chip makers.

Intel, the world’s top semiconductor maker, fell 41 cents to $23.58. Xilinx slid 98 cents to $24.78. The SOX index of semiconductor stocks sank 3.1%.

* Media stocks were a bright spot after Los Angeles-based Univision Communications, the No. 1 U.S. Spanish-language media company, forecast higher earnings and revenue in the current quarter. Shares of Univision gained $3.89, or 13.4%, to $32.96, pushing the S&P; index of broadcasting stocks up 0.9%.

* Williams, the second-largest U.S. natural gas pipeline owner, climbed 58 cents to $7.60. A Morgan Stanley analyst said investors should buy the stock, which has fallen 20% since June 6, and upgraded his rating to “overweight” from “equal weight.”