Dollar Decline Weighs on Stocks

The Dow ends lower for the week.
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Updated from 1:16 p.m. EST

Stocks dropped Friday as a steep decline in the dollar brought out sellers in a holiday-shortened session.

The

Dow Jones Industrial Average

fell 46.78 points, or 0.38%, to 12,280.17, pressured by a 1% fall in component

Home Depot

(HD) - Get Report

. The

S&P 500

was off 5.14 points, or 0.37%, to 1400.95, and the

Nasdaq Composite

was lower by 5.72 points, or 0.23%, to 2460.26.

The day after Thanksgiving is typically one of the lowest-volume trading days of the year, providing increased volatility. About 884 million shares traded on the

New York Stock Exchange

, compared with a more typical day in which volume tops 1 billion shares. Advancers beating decliners by an 8-to-7 margin.

Trading volume on the Nasdaq was 676 million shares, with falling stocks outpacing out those that rose by a margin of 3 to 2.

Robert Pavlik, chief investment officer with Oaktree Asset Management, is looking to next week's numbers as a broader indicator about the market.

"The rally on Wall Street has been largely based on two important factors: the decline in energy prices and the belief that the U.S. economy will not fall into a recession," says Pavlik. "Next week's numbers will go a long way in determining whether or not the rally will continue into the final month of the year."

Friday's move lower punctuates a week where the Dow fell 62 points, or 0.5%, from its all-time high. On the other hand, the S&P 500 gave back a fraction of a point for the week. The Nasdaq rose 14 points, or 0.6%, during the four sessions.

The dollar tumbled against foreign currencies, reaching a one-and-a-half-year low against the euro. The selloff was partly exacerbated by thin trading conditions. Following the dollar's decline, gold futures jumped higher by $10.10 to $645.50 an ounce.

The Nymex was closed Friday, marking the first time the Chicago Board of Trade's contract for precious metals has been open while the Nymex is closed.

An ensuing rally in commodity-related shares gave little support to the broader market. Miners

Barrick

(ABX)

and

Newmont

(NEM) - Get Report

rose 2.4% and 1.5%, respectively. The Amex Gold Bugs index gained 2.5% and the Philadelphia Gold & Silver Sector index added 2.3%.

Among companies, retailers are in focus as shoppers rush to the stores for "Black Friday." Big chains such as

Wal-Mart

(WMT) - Get Report

,

Best Buy

(BBY) - Get Report

and

Federated Department Stores

(FD)

all opened their stores early and offered big promotions to lure in shoppers.

Retail shares were sluggish despite news that shoppers were out in droves.

Target

(TGT) - Get Report

was off 1.2%,

Kohl's

(KSS) - Get Report

lost 0.8%, and Wal-Mart ended down 0.3%.

Without any releases on the economic docket, the 10-year note was up 3/32 in price and yielding 4.55%. Crude prices retraced some of Wednesday's decline, as oil was recently up 52 cents to $59.76 a barrel in electronic Nymex trading.

On Wednesday, stocks finished modestly higher, as tech stocks got a lift from Dell's

(DELL) - Get Report

stronger-than-expected third-quarter earnings report. The S&P 500 tacked on 3.28 points, or 0.23%, to 1406.09, and the Nasdaq was up 11.14 points, or 0.45%, to 2465.98.

The Dow added 5.36 points, or 0.04%, to 12,326.95, despite weakness in component

General Motors

(GM) - Get Report

. The world's biggest automaker fell nearly 5% on news that its largest individual shareholder, Kirk Kerkorian, sold some of his stake in the company. GM shares were among the few Dow gainers Friday, rising 14 cents, or 0.5%, to close at $31.23.

Overseas, European markets closed lower. London's FTSE 100 was down 0.3% at 6122, and Frankfurt's Xetra DAX lost 1% to 6412. Asia's markets also lost ground overnight. The Nikkei eased 1.1% at 15,734, and the Hang Seng dipped 0.03% to 19,260.