Flat Day, Ugly Week for Stocks

Updated from 4:05 p.m. EDT

Stocks were little changed Friday but sharply lower for the week, as a relentless rally in oil prices and a parade of warnings in the chip sector halted the market's August-September rally.

The Dow Jones Industrial Average closed higher by 8.34 points, or 0.08%, to 10,047.24, well off the session's high of 10,081; the S&P 500 rose 1.75 points, or 0.16%, to 1110.11, and the Nasdaq declined 6.95 points, or 0.37%, to 1879.48, as oil prices rode a late-day surge to close at a new high.

The Dow finished its worst week since Aug. 2, losing 237.22 points, or 2.3%, while the S&P dropped 1.6%, snapping a six-week winning streak. The Nasdaq also ended 1.6% lower for the week.

Volume was light Friday, with 1.3 billion shares trading on the New York Stock Exchange, as advancers barely beat decliners by 5 to 4; while at the Nasdaq, 1.4 billion shares changed hands, with an advance-decline ratio evenly split.

Oil prices, which eased earlier Friday, reversed course and hit a new high of $48.90 a barrel, before settling at $48.88, up 42 cents for the day in Nymex trading.

Larry Wachtel, senior market analyst at Wachovia Securities, said the release of crude oil from the strategic petroleum reserves doesn't solve the problem, and that's why oil prices rose in the afternoon. "There is just an ongoing momentum in oil. It seems unstoppable now, and that is definitely a detriment to the markets."

But Wachtel believes there's more to the weeklong market pullback than oil. After six weeks of rallying, the markets "were crusing for a bruising. You were going to get around to profit-taking sooner or later, and we got it on Wednesday and Thursday."

In other markets, the 10-year Treasury note was down 1/32 to yield 4.02%. Earlier in the week, the yield fell below 4% for the first time in almost six months. The dollar was up against the yen and down against the euro. Gold was lower.