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Stocks Close Slightly Lower

However, the major averages end the week with solid gains overall.

Updated from 4:04 p.m. EDT

Stocks ended with small losses Friday, as investors displayed caution after a big rally this week and as the dollar came under pressure.

The

Dow Jones Industrial Average

closed down 14.31 points, or 0.2%, to 9644.82, while the

Nasdaq

lost 3.85 points, or 0.2%, at 1905.70. The

S&P 500

fell 3.28 points, or 0.3%, to 1036.30. Declines were generally broad-based, with financials and chips both lower after posting impressive gains Thursday.

For the week, the Dow ended up 173 points, or 1.8%, and the S&P 500 rose 18 points, or 1.7%. The Nasdaq gained 51 points, or 2.7%.

"The dollar is under assault today, and that could be spooking traders," said Sean Martin, head trader at A. Gary Shilling & Co.

The dollar fell against the yen and the euro ahead of the G7 meeting this weekend. The organization is expected to call on China and Japan to let their currencies appreciate. So far, those countries have taken steps to prop up their currencies in order to protect their exports.

A weaker dollar can help U.S. exports and will likely contribute to a narrower trade deficit. But it can also prompt foreigners to take their money out of dollar-denominated assets like stocks and bonds. While this hasn't happened so far this year, policy changes in Asia could have an impact.

Martin said he's expecting further consolidation in the stock market next week. "I still think this move needs to be sold into," he said.

The expiration of options and futures contracts on individual stocks and stock indexes had little effect on the market Friday, according to some traders.

"It seems that triple-witching is more effective earlier in the week," said Jay Suskind, head of institutional equity trading at Ryan Beck & Co. "It's really an uneventful day; there's no real news out there."

TheStreet Recommends

The Dow rose 113 points Thursday to record its highest close since June of last year. The S&P also ended at its highest level since June 2002, while the Nasdaq was up 1.4% to its best level in 17 months.

"The Grasso resignation, Hurricane Isabel and mixed results for the Philadelphia Fed Index were unable to stop the bulls," said William P. Livesey, senior technical analyst at CyberTrader. "The ability to shrug off bad news is a great sign for the market. It shows that the buyers have lots of conviction, thus the market is likely to continue in its short-term uptrend."

The

New York Stock Exchange's

search for a new chairman to replace Richard Grasso will be led by BlackRock Chief Executive Laurence Fink, according to

The Wall Street Journal

.

Among the earnings news, shoemaker

Nike

(NKE) - Get NIKE, Inc. Class B Report

earned 98 cents a share in its first quarter, beating Wall Street's expectations by a dime with the help of currency gains and strong sales overseas. Shares rose 7%, or $4.25, to $61.50.

Another company to report results was handheld computer maker

Palm

(PALM)

, which narrowed its fiscal first-quarter loss. But revenue grew less than analysts were expecting amid weaker U.S. sales. The stock was down 7%, or $1.70, to $21.05.

Meanwhile,

3Com

(COMS)

reported a wider loss due to lower revenue and restructuring charges. Still, shares were up 8%, or 49 cents, at $6.55.

Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report

said it plans to cut 1,000 workers, or about 3% of its workforce, in an effort to reduce costs and improve its earnings.

Analysts were active once again, with Wachovia downgrading

Amgen

(AMGN) - Get Amgen Inc. Report

to market perform from outperform, saying the biotech concern is unlikely to meet current growth targets as competition increases from

Roche

.

BEA Systems

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was upgraded at SG Cowen to outperform from market perform on higher expected earnings due to improving performance vs. its rivals. Shares were up 2%, or 26 cents, at $13.94.

J.P. Morgan added

Tyco

(TYC)

to its Focus List, saying investors are overly pessimistic about the company's fire and security unit. It also cited steady turnaround progress and expected improvement in its balance sheet.

In other corporate news, the largest U.S. drug wholesaler,

AmerisourceBergen

(ABC) - Get AmerisourceBergen Corporation Report

, is reportedly under investigation by the FBI and the Food and Drug Administration over allegations it diverted drugs into a secondary market to get rebates from drugmakers. Shares fell 3%, or $1.82, at $54.83.

Elsewhere,

Blockbuster

(BBI) - Get Brickell Biotech, Inc. Report

is in talks to merge with CD and DVD retailer Columbia House in an effort to reap gains from customers' preference to buy cheap DVDs as opposed to renting them,

The Wall Street Journal

reported. Thomas Weisel analysts upgraded the stock to outperform from peer perform on forecasts of stronger quarterly results.

Overseas markets were lower, with London's FTSE 100 down 1.3% at 4257, and Germany's Xetra DAX off by 0.9% to 3579. In Asia, Japan's Nikkei closed 0.9% lower at 10,938, while Hong Kong's Hang Seng fell 0.9% to 10,968.

Treasuries were mostly lower. The 10-year note was up slightly at 100 21/32 with the yield at 4.17%. Crude oil futures were lower in New York.