Wall Street Ekes Out Gains

News of an MBIA investment offsets weak retail in light trading.
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Updated from 4:14 p.m. EST

Stocks closed a lightly traded post-Christmas session with little change Wednesday, as news of investments in two troubled financial firms helped temper weakness on the retail and housing fronts.

The

Dow Jones Industrial Average

inched up 2.4 points to 13,551.69, having slid as many as 56 points early in the session. The

S&P 500

rose 1.2 points, or 0.1%, to 1,497.66. The

Nasdaq Composite

added 10.9 points, or 0.4%, to 2,724.41.

Almost 2 billion shares changed hands on the

New York Stock Exchange

, where advancers and decliners were about even. On the Nasdaq, 1.2 billion shares were traded, as advancers outpaced decliners by a 5-to-4 ratio.

Stocks spent the early part of the session in negative territory after several reports indicated that last-minute Christmas shopping wasn't strong enough to offset an otherwise weak December. But the major averages inched back up after Davis Selected Advisers disclosed that it bought a 5.1% stake in

MBIA

(MBI) - Get Report

for roughly $129 million.

MBIA, a big bond insurer, has been widely cited as particularly vulnerable to the burgeoning mortgage crisis on Wall Street. Its shares closed up $2.21, or 11%, to $22.33.

Davis also earlier this week agreed to invest $1.2 billion to acquire a stake in battered broker

Merrill Lynch

(MER)

. The firm appears to be pouncing on what it sees as bargains in a sector that is reeling from massive writedowns on mortgage investments.

Likewise, fresh regulatory filings revealed that British billionaire Joseph Lewis has upped his stake in

Bear Stearns

(BSC)

, another Wall Street firm that has been pounded by credit problems. Lewis now owns to 9.6% of the company, up from 8%.

"Investments like these show that there's a boatload of liquidity out there and this credit crisis has really been all about a lack of confidence to use it," said James Paulsen, chief investment strategist with Wells Capital Management. "Now, we're seeing that investors are willing to step up and provide capital. So things are looking better, but it's hard to get too excited about things until we have a full slate of traders back in the new year."

Meanwhile, billionaire investor Warren Buffett, said his investment vehicle

Berkshire Hathaway

will buy a 60% stake in the Pritzker family's Marmon Holdings, a privately held industrial conglomerate, for $4.5 billion. A famous bargain-hunter, Buffett has become active of late, but he told

CNBC

on Wednesday that he doesn't see value in financials yet.

Among the retail data, the International Council of Shopping Centers reported a mere 2.8% uptick in its same-store sales index last week and warned that actual December sales results will miss its original forecast.

MasterCard Advisors reported holiday spending rose 3.6% from a year earlier, led by luxury-goods and electronics, but actual sales excluding gas purchases were weaker than expected.

"We knew retailers would be weak, but the hope was they would hold up a little better than they did," said Peter Dunay, chief market strategist with Leeb Capital Management. "It looks like more and more of the inflation picture is taking hold here as consumers spend more money to fill their gas tanks and buy food. That seems to be sapping their appetite to buy other things."

Adding to inflation worries, crude oil futures closed at a new one-month high, up $1.71 to $95.84 a barrel on reports of Turkish air strikes against Kurdish positions in Northern Iraq.

Target

(TGT) - Get Report

contributed to the negative retail sentiment. The company said after Monday's close that December same-store sales were far worse than originally expected and may actually decline for the month.

Shares of Target closed down $1.31, or 2.5%, to $51.16. The S&P Retail Index was sliding 1.2% to 414.24, with stocks such as

J.C. Penney

(JCP) - Get Report

,

Macy's

(M) - Get Report

and

Nordstrom

(JWN) - Get Report

each falling at least 3%.

"We need to make sure that there's no more major shocks to the economy before we can really get a rebound from the market, and if we start to see consumers saying they're no longer going to spend, then we have a problem," said Dunay.

Much of consumers' troubles stem from the slumping housing market, which was the subject of more bleak data Wednesday. The S&P/Case-Shiller home price index, a closely watched housing measure, showed a 6.7% decline for the nation's 10 largest markets in October, a record drop. The broader 20-city index saw a 6.1% fall.

Toyota Motor

(TM) - Get Report

added $1.62, or 1.5%, to $108.87 after the automaker announced a 2008 sales target of 9.85 million, which would top the 1978 record of 9.55 million set by

General Motors

(GM) - Get Report

.

U.S. Treasury prices were slipping. The 10-year note slipped 17/32 in price, yielding 4.25%. The 30-year bond was off 31/32 in price, yielding 4.67%.

Most overseas markets remained closed in observance of the Boxing Day holiday. Among those that opened for trading, Japan's Nikkei 225 rose 0.7%.