Updated from 4:10 p.m. EST
Christmas spirit was in short supply in New York on Friday, and stocks finished to the downside ahead of a long holiday weekend and the last trading week of 2006.
Dow Jones Industrial Average
lost 78.03 points, or 0.63%, to 12,343.22, and the
was off 7.54 points, or 0.53%, at 1410.76. The
fell 14.67 points, or 0.61%, to 2401.18.
Ken Tower, chief market strategist with CyberTrader, argues that while the market's behavior represents a threat to the bull case, there's not a reason for panic.
"The Nasdaq is at the bottom of its trading range, but hasn't broken down," Tower said. "The longer-term trend is still up and I think you have to give the bulls a lot of leeway here."
For the week, the Dow surrendered 102 points, or 0.8%, snapping a two-week winning streak. The S&P 500 was lower by 16 points, or 1.1%, and the Nasdaq relinquished 56 points, or 2.3%, over the five sessions.
Volume was light on the final trading session before the Christmas holiday, which will keep markets closed on Monday. On the
New York Stock Exchange
, roughly 1.69 billion shares changed hands, with decliners beating advancers by a 5-to-3 margin. Just 1.36 shares were swapped on the Nasdaq, where losers outpaced winners 8 to 7.
By subgroup, oil stocks were among the worst performers of the session. The Amex Oil Index fell 1.2%, and the Philadelphia Oil Service Sector Index eased 0.6%. Telecom stocks were also hit hard. The Nasdaq Telecom Index slipped 1.3%.
Before the session began, the Commerce Department said durable-goods orders rose 1.9% in November, higher than expectations of a 1.2% increase. Excluding transportation, orders were down 1.1%. The personal consumption expenditure core rate, a key measure of inflation for the
, was unchanged.
Peter Morici, professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission, said that core consumer price inflation is beginning to fall within Fed Chairman Ben Bernanke's target range of 1% to 2%.
"However, a few months of favorable news on core inflation are not enough to declare victory in the fight on inflation," Morici added. "More good news will be needed to convince the Federal Reserve that inflation is corralled."
Also on the economic docket, the government said personal spending rose 0.5% last month, slightly below what had been forecast. Income rose 0.3%, falling short of the 0.4% consensus estimate.
Additionally, the University of Michigan's consumer sentiment index rose to a final December reading of 91.7 from a preliminary 90.2. Economists expected an increase to 90.7.
Following the previous close, things were busy on the technology front. Shares of Linux distributor
surged as the company had a solid third-quarter report, topping profit estimates by 2 cents and saying revenue jumped 45%. Red Hat gained $4.50, or 25.1%, to finish at $22.46.
Research In Motion
beat analysts' adjusted earnings targets for its latest quarter and had revenue of $835.1 million, easily surpassing the consensus target. Shares of RIM retraced early gains and closed lower by $3.70, or 2.8%, at $130.
cut its first-quarter earnings forecast, citing higher legal costs and a nonpayment from a customer, but said revenue would be at the high end of its expectations. Qualcomm lost 73 cents, or 1.9%, to $37.81.
posted first-quarter earnings of $432 million, or 43 cents a share, up 25% from the year-ago period. Revenue rose 17% from a year earlier to $12.71 billion. The Thomson First Call consensus was for earnings of 41 cents a share on revenue of $12.55 billion. Shares gained 72 cents, or 1.6%, to $46.68.
Among analyst moves, RBC Capital Markets upgraded
Chipotle Mexican Grill
to outperform from underperform, and First Albany raised its rating for
to buy from neutral.
Chipotle rose $1.07, or 2%, to close at $55.52. Micron added 46 cents, or 3.1%, to $13.95.
Turning to commodities, the February oil contract finished lower ahead of the holiday, losing 25 cents at $62.41 a barrel in volatile trading. Natural gas also slipped. Precious metals ticked higher, with gold finishing up 70 cents to $622.30 an ounce and silver adding 14 cents to $12.63 an ounce.
Overseas, the Tokyo Nikkei climbed 0.3% to 17,105, and Hong Kong's Hang Seng was higher by 0.5% at 19,320. London's FTSE was up 0.1% at 6190, and Frankfurt's Xetra DAX eased 1.1% at 6503.