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Stocks Flat With Elections, Fed on Tap Next Week

The Dow edged up but investors were little moved by a batch of ho-hum economic data and opted to avoid making big moves ahead of key events next week. Gregg Greenberg has The Real Story.

NEW YORK (

TheStreet

) -- Stocks finished flat on Friday as investors were little moved by a batch of ho-hum economic data and opted to avoid making big moves ahead of key events next week.

The week ahead will be a big one with mid-term elections and the Fed's policy meeting setting the tone for the markets, in addition to the regular stream of earnings data and the nonfarm payrolls number. The market is pricing in a Republican takeover of the House of Representatives and a measured quantitative easing move from the Fed.

The

Dow Jones Industrial Average

closed 4 points, or 0.04%, higher at 11,118. The

S&P 500

was down by half a point to 1183, while the

Nasdaq Composite

settled nominally higher at 2,507.

Alcoa

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,

IBM

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and

Microsoft

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were leaders on the Dow while

Chevron

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and

Merck

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were among the biggest blue-chip losers.

The Dow finished October with a gain of 3%. Stocks have so far advanced this year at half the pace of 2009 as the U.S. struggles to recover from the worst economic downturn since the Great Depression with much of the gains coming in the past two months.

News that two packages bound for the United States from Yemen were found to have contained explosives in a suspected terrorist plot didn't seem to impact trading in equities on Friday.

The

U.S. economy expanded 2% in the third quarter, according to the Department of Commerce's advance estimate. The quarterly GDP increase met expectations and confirmed recent trends that suggested economic growth was slowing. Personal consumption spending, the largest driver of U.S. GDP, rose 2.6% on a sharp increase in demand for services

"Given the magnitude of the recession, the initial boost in growth was underwhelming, and the slow pace of growth that the economy has since settled into suggests that job creation and income growth are also likely to remain tepid in the quarters ahead," wrote Jim Baird of Plante Moran Financial Advisors in a research note.

Baird expects the Fed will likely go ahead with quantitative easing with the recent reports unlikely to alter the Fed's outlook on unemployment and inflation.

Vote:Will QE2 Work?

Manufacturing activity in the Chicago area came in at a better-than-expected level of 60.6 in October, strengthening from September's reading of 60.4. Economists had anticipated a lower reading of 58, according to Briefing.com.

Meanwhile, the University of Michigan's final reading on October consumer sentiment came in at 67.7, slightly below the reading of 68 that economists had expected and also weaker than September's level of 68.2, according to Briefing.com.

Late Thursday,

Microsoft

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reported better-than-expected first-quarter earnings of 62 cents per share, and sales rose 25% to $16.2 billion, exceeding Wall Street estimates. Shares rose 1.5% to $26.67.

Chevron's

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third-quarter profit of $1.87 a share missed Wall Street's forecast for earnings of $2.15 a share but sales of $49.72 billion exceeded estimates for $49.48 billion. The stock slipped 2.2% to $82.60.

Merck

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reported a 90% drop in third-quarter earnings but adjusted earnings of 85 cents a share beat expectations by 3 cents, and sales of $11.1 billion were largely in line with calls for revenue of $11.2 billion. The company lifted the low end of its full-year per-share earnings guidance to between $3.31 and $3.39, and sales are expected to be between $45.4 billion and $46.1 billion. Analysts are expecting 2010 earnings of $3.36 a share on sales of $45.58 billion. Shares fell 1.7% to $36.31.

Managed care company

Cigna

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said net earnings fell 6.7% to $1.13 a share, which included losses of 16 cents a share. The average analysts' estimate, which typically excludes nonrecurring items, called for a profit of $1.06 a share. Sales increased to $5.3 billion from $4.5 billion a year ago, and the company guided for 2010 adjusted profits in the range of $4.35 to $4.50. The stock was 1.4% lower at $35.16

Shares of

Monster Worldwide

(MWW)

soared 25% to $18.06 after the company earned 2 cents a share in its most recent quarter, excluding certain costs. Analysts had expected the company to break even.

Coinstar

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jumped 25% to $57.58 after it beat expectations with earnings of 66 cents a share.

Shares of

NuVasive

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plunged 28% to $ 26.17 after the San Diego medical device company made deep cuts to its full year outlook, citing "challenging conditions" in the spine market.

Honda

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said profits more than doubled in the second quarter to 135.93 billion yen ($1.68 billion), and sales rose 9.5% to 2.252 trillion yen. Shares shed 1.1% to $36.03.

Newell Rubbermaid

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said earnings sank 67% on charges but adjusted earnings of 42 cents a share came in a penny above estimates. Sales gained 3% to $1.49 billion, topping expectations for $1.45 billion. The stock lost 0.8% to $17.65.

Estee Lauder

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said earnings jumped 36%, easily topping first-quarter estimates with an adjusted profit of 97 cents a share. Wall Street had expected earnings of 77 cents a share. Sales gained 14% to $2.09, which also exceeded the $2.02 billion in sales that analysts' projected. Shares jumped 10.5% to $71.17.

Shares of

First Solar

dropped 9% to $137.68 after it reported a big drop in gross margins. Analysts at Deutsche Bank and Macquarie Research downgraded the stock.

Shares of

Nissan

(NSANY)

fell 2.6% to $17.47 after

it announced its third largest recall to date.

Pfizer

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widened a recall of its cholesterol drug Lipitor on reports of musty or moldy odors associated with the product. Shares closed 0.8% lower at $17.42

Shares of

Genworth Financial

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tanked 10% to $11.33 after hedge fund manager Steve Eisman said on the company's conference call that the company had destroyed shareholder value and that it should shut down some of its businesses and use the cash to buy back shares.

Take-Two

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announced that its CEO Ben Feder will be stepping down. Take-Two has struggled with activist investor Carl Icahn, who owns around 14% of the company. In January, Icahn replaced three members of the board with his own people. Shares rose 4.7% to $10.67.

In commodity markets, the December crude oil contract shed 75 cents to settle at $81.43 a barrel. The December gold contract added $15 to settle at $1,357 an ounce.

Meanwhile, the dollar was trading higher against a basket of currencies, with the dollar index down by 0.1%, and the benchmark 10-year Treasury note strengthened 14/32, diluting the yield to 2.616%.

Overseas, Hong Kong's Hang Seng shed 0.5% while Japan's Nikkei lost 1.8% higher. The FTSE in London ended flat and the DAX in Frankfurt gained 0.1%.

--Written by Melinda Peer and Shanthi Venkataraman in New York

.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.