Updated from 4:09 p.m. EST
A choppy session for stocks ended close to the flatline Friday as fatigued buyers failed to draw inspiration from benign inflation news and a bidding war in the medical sector.
Dow Jones Industrial Average
fell 2.49 points, or 0.02%, to 10,959.87. The
rose 1.55 points, or 0.12%, to 1287.61. The
ticked up 0.35 point, or 0.02%, to 2317.04. Weighing on stocks was oil, which remained pinned near $64 a barrel as Iran's threat to restart its nuclear program kept energy markets on edge.
"Today's trading was moderately positive, given the background," said Barry Hyman, equity market strategist with Ehrenkrantz King Nussbaum. "The continued movement in oil and the geopolitical news have the potential to hurt this market. Still, we've had a great seven days, and we're seeing shifts of consolidation. We may be in for a little more downside next week before the rally can resume."
The Dow closed below 11,000 for a second consecutive day after breaching the level on Monday and closing above it Tuesday and Wednesday.
"We've had a good beginning of the year, and the market is now tired," said Jay Suskind, head of institutional equity trading with Ryan Beck & Co. "Volumes languished ahead of the three-day weekend. We have the nuclear issues in Iran, bringing a geopolitical concern that we haven't seen in a while."
For the week, the Dow gained half a point, while the S&P added 2.16 points, or 0.16%. The Nasdaq added 11.42 points, or 0.49%.
About 1.54 billion shares traded on the
New York Stock Exchange
Friday, with advancers beating decliners by a 6-to-5 margin. Trading volume on the Nasdaq was 1.75 billion shares, with advancers outpacing decliners 8 to 7.
Oil closed marginally lower even after Iran threatened to halt U.N. nuclear inspections if Western countries make good on threats to bring the country before the Security Council. Iran has taken steps this week to restart nuclear research, raising concerns about retaliatory sanctions. February crude finished down 2 cents to $63.92 a barrel.
The Nymex finished trading at 1 p.m. EST ahead of the holiday weekend. On Monday, U.S. markets will be closed in observance of Martin Luther King Jr. Day.
The 10-year Treasury bond was up 14/32 in price to yield 4.35%, 2 basis points above the two-year note, while the dollar fell against the euro and the yen.
Two big pieces of economic data were released before the opening bell. The Labor Department said the producer price index rose 0.9% in December, ahead of expectations of a 0.4% rise. Excluding food and energy, the core PPI number was up 0.1%, slightly below expectations.
To view Gregg Greenberg's video take on today's market, click here
"The core rate shows that inflation is still pretty much under control," said Peter Cardillo, chief market analyst with S.W. Bach & Co. "This is a good number as far as the
is concerned, as it would give them one more reason to halt the campaign."
Meanwhile, the Commerce Deparment said retail sales rose 0.7% in December, coming in below economists' estimates of a 1.0% increase. Excluding autos, sales were up 0.2%, also below estimates. Sales in October and November were revised higher by a cumulative 0.4%.
Separately, the Commerce Department said U.S. business inventories rose 0.5% in November as sales grew 0.1%. Economists expected inventories to increase 0.4% in November after a 0.3% rise in October.
Stocks ended with losses Thursday, with the Nasdaq posting its first losing session of 2006, as profit-takers swooped in after a nearly uninterrupted rally since New Year's Day. The Dow lost 0.7% to 10,962, ending a three-day stint above 11,000. The S&P 500 fell 0.6% to 1286.
By sector, the Amex Airlines index was lower by 1.1%, the Philadelphia Semiconductor Sector index fell 0.5% and the Philadelphia Housing Sector index was off 0.3%. The Amex Oil index rose 1.3%.
Dominating the corporate docket Friday was the takeover battle around
last night sweetened its offer for the medical-device company to $73 a share from $72. Boston Scientific says Guidant has until 4 p.m. to decide between its offer and
Johnson & Johnson's
Guidant closed up 44 cents, or 0.6%, to $70.84. J&J was lower by 39 cents, or 0.6%, to $61.82. Boston Scientific was tacking on 15 cents, or 0.6%, to $25.20.
American International Group
reportedly will pay more than $1 billion to settle civil charges that it used misleading accounting to burnish its financial statement over five years.
The deal would end probes by state authorities in New York and the
Securities and Exchange Commission
Wall Street Journal
said. Former CEO Maurice Greenberg is not a party to the settlement talks. AIG slipped 21 cents, or 0.3%, to $70.05.
confirmed a plan to break itself into three companies through tax-free spinoffs of its health care and electronics units. The company also lowered its estimate of first-quarter earnings to 38 cents a share from 40 cents to 42 cents. Tyco tumbled $3.19, or 10.5%, to $27.12.
The SEC told
it has opened a formal investigation into disclosures surrounding the company's first-quarter earnings statements. The quarter was the first in which the company expensed stock-options grants to employees. IBM was off 40 cents, or 0.5%, to close at $83.17.
said it expects to see improving results in 2006 and even greater progress in 2007 as the automaker continues its turnaround plan for operations in North America. GM added 59 cents, or 2.8%, to $20.37.
said first-quarter revenue and fiscal 2006 results will be lower than expected, citing a sales shortfall in the U.S. and China. Lucent now expects 2006 revenue to be flat or up in the low-single digits and first-quarter revenue of about $2.05 billion, down from the previous forecast of $2.43 billion. Lucent lost 6 cents, or 2.2%, to $2.65.
Among ratings moves, RBC Capital Markets raised its
stock price target to $500 from $475, citing expectations of a "jaw-dropping outperformance" for the company's fourth-quarter earnings. The firm reiterated its outperform rating and raised forecasts for fourth-quarter, 2006 and 2007 earnings. Google gained $2.62, or 0.6%, to $466.25.
Meanwhile, RBC raised its price target for
to $42 from $36, saying it expects an increase in the company's financial results. The firm reiterated its rating of sector-perform on the stock, however, as it doesn't see a change in the stock's valuation. Yahoo! was down 99 cents, or 2.4%, to finish at $39.90.
Goldman Sachs upgraded Dow component
to outperform from in-line, citing improvement in the company's overall business. The firm also raised its 2006 and 2007 earnings estimates. H-P was higher by 88 cents, or 2.8%, to $31.90.
Earlier this week, Prudential upgraded H-P. The shares have now gained 4.6% for the week.
Deutsche Bank downgraded
Advanced Micro Devices
to sell from hold. The firm said it expects competition to slow the company's strong momentum after the fourth quarter. AMD dropped $1.22, or 3.5%, to $34.13.
Overseas markets were mixed, with London's FTSE 100 falling 0.4% to 5711, while Germany's Xetra DAX fell 1.1% to 5483. In Asia, Japan's Nikkei rose 0.1% overnight to 16,455, while Hong Kong's Hang Seng added 0.4% to 15,788.