NEW YORK ( TheStreet) -- The major U.S. stock averages closed near the flatline Friday as disappointing results from companies such as Apple (AAPL - Get Report) and elevated concerns on earnings forecasts overshadowed a better-than-expected read on domestic economic growth.
Apple shares shed 0.91% on its delivery Thursday of a
below-consensus quarterly profit but topped Wall Street's revenue expectations.
The Dow Jones Industrial Average added four points, or 0.03%, at 13,107. The blue-chip index began the session up a little over 7% in 2012, but closed down 1.77% for the week.Breadth was negative, with losers outpacing gainers 18 to 12. The top percentage decliners included Bank of America (BAC), JPMorgan Chase (JPM), Alcoa (AA) and Procter & Gamble (PG). Merck (MRK) shares edged 0.32% lower after the drugmaker reported third-quarter earnings of 95 cents a share on revenue of $11.5 billion, versus the average analyst estimate of 92 cents a share on revenue of $11.57 billion as overhead spending cuts helped offset weaker sales impacted by generic competition for its Singulair drug. Wal-Mart (WMT) shares ticked down 0.29% after the retail giant said Friday that it plans to open 100 stores in the next three years in China and add 18,000 jobs. The pace of store openings is a slowdown from earlier growth rates for Wal-Mart in the competitive Chinese retail sector. Intel (INTC), Microsoft (MSFT) and United Technologies (UTX) were leading the blue-chip advancers. The S&P 500 fell 1 point, or 0.07%, at 1412. The index fell 1.48% on the week. The Nasdaq was off 2 points, or 0.06%, at 2985. The tech-heavy index closed off 0.59% for the week. Decliners were outnumbering advancers by a 1.4-to-1 ratio on the New York Stock Exchange and the Nasdaq. Volume was at 3.28 billion on the Big Board and 1.79 billion on the Nasdaq. All sectors in the broad market were in the red, weighed down most heavily by consumer cyclicals, financials, technology, capital goods and basic materials. The Bureau of Economic Analysis said Friday that its advanced estimate on U.S. gross domestic product showed growth of 2% in the third quarter, above economists' average expectation of 1.9%, and versus growth of 1.3% in the second quarter. "The advance third-quarter reading of GDP confirmed the impact on the health of the world's largest economy from a slowdown in global demand, but improved upon a lackluster second quarter," said Andrew Wilkinson, chief economic strategist at Miller Tabak. The final read on the University of Michigan Consumer Sentiment Index for October came in lower-than-expected at 82.6 and below the prior estimate of 83.1. Economists, on average, were expecting a read of 83. "Right now the issue of the fiscal cliff seems to have emerged as a bigger stumbling block to investor sentiment than the slowly diffusing threat from the eurozone's sovereign debt crisis," said Wilkinson of Miller Tabak. "For sure it is hard to disentangle the issues weighing on the health of the stock market. We continue to feel that slowing demand in Asia was fueled by a collapse in Europe and its creep onto American shores was just a matter of time. Indeed that path explains most of the slowdown in company earnings. However, the rise in contention over the U.S. fiscal debate heading into a tightly -fought election seems to be growing in stature as companies repeatedly explain away the lack of clarity about the future." Amazon.com (AMZN) shares rebounded, up 6.9%, after plunging into the red Thursday when the company came up short on both the top and bottom line in its latest quarter despite a year-over-year sales increase of nearly 30%. The FTSE in London closed up 0.03% and the DAX in Germany finished up 0.44%. Reports Friday showed that Spain's unemployment rate soared to record highs in the third quarter, while the forward-looking read on Germany's GfK consumer sentiment survey for November was upbeat. The Nikkei Average in Tokyo closed down 1.35% on Friday and Hong Kong's Hang Seng Index finished down 1.21% after data revealed South Korea's economy grew at its slowest clip in about three years in the third quarter. December crude oil futures rose 23 cents to close at $86.28 a barrel. December gold futures fell $1.10 to settle at $1,711.90 an ounce. The benchmark 10-year Treasury was up 22/32, lowering the yield to 1.752%. The dollar was down 0.04%, according to the dollar index. Arch Coal (ACI - Get Report) shares jumped 10.7% after the coal producer booked a surprise profit in the third quarter -- analysts were expecting a loss per share -- and better-than-expected revenue thanks to cost-cutting, and amid rising thermal coal shipments. Goodyear Tire & Rubber (GT) shares tumbled 10.4% after the company posted third-quarter results that missed expectations, hurt by economic worries in the Europe and U.S. Comcast (CMCSA) posted third-quarter earnings that were in line with expectations and sales that exceeded forecasts as the company booked $1.2 billion of revenue generated by the 2012 London Olympics. Shares gained 3.3%. WhiteWave Foods ( WWAV ) shares closed down 1.5% after the initial public offering of the specialty-organic foods company, which is spinning off from Dean Foods (DF). WhiteWave priced above the anticipated range Thursday evening. Dean Foods shares dropped 10.9% as Stifel Nicolaus downgraded the stock to hold, reflecting "the rapid stock price move in the last two weeks due to the higher-than-expected valuation for the WhiteWave IPO." Meanwhile, Dean Foods' Morningstar business has attracted takeover interest from Michael Foods and Mexican dairy company Grupo Lala, people familiar with the matter told Reuters, in a deal that could be valued in the $1 billion to $1.5 billion range. Expedia (EXPE - Get Report) shares leaped 15.2% after the online travel services company beat third-quarter earnings projections amid several quarters of robust sales growth boosted by hotel reservations. The stock has been upgraded to buy at Lazard and Benchmark, and to outperform at Raymond James. --Written by Andrea Tse and Joe Deaux in New York.
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