By Kate Gibson
U.S. stocks on Friday erased early losses to finish nearly flat
for the week after the Bush administration said it would step in to
prevent a failure of U.S. automakers amid worries that more layoffs
would deepen the recession.
"The Treasury said it'll step up, and at least give them an IV
drip until they get to the new Congress," said Bill Stone, chief
investment strategist for PNC Wealth Management.
"I can't imagine the market for that timeframe is going to enjoy
having that hang over us - you have to believe it saps on
confidence," said Stone.
Down about 200 points at the start, the Dow Jones Industrial
Average (DJI) climbed 64.59 points, or 0.8%, to end at 8,629.68,
leaving the blue-chip index off nearly 0.1% from last Friday's
close.
Twenty-one of the Dow's 30 components ended in the green, led by
Intel Corp. (INTC), up 5.3%.
Up and down throughout the session, shares of General Motors
Corp. (GM) lost 4.4%.
Off the Dow, shares of Ford Motor Co. (F) gained 4.8%.
Earlier, the Treasury Department said it would make funds
available to automakers until Congress has time to consider a
long-term rescue package next year. .
"We're walking on thin ice in the market right now, so the more
certainty we get with these automakers, the better," said Harry
Rady, CEO of Rady Asset Management.
Shares of Bank of America Corp. (BAC) edged fractionally higher
in the wake of its downgrade by Standard & Poor's Equity
Research, which followed word the bank would cut as many as 35,000
jobs during the next three years. .
The S&P 500 (SPX) climbed 6.14 points, or 0.7%, to 879.73,
giving it a 0.4% rise on the week.
Financials, information technology and materials fronted gains
that stretched to include seven of the index's 10 industry groups,
while energy, telecommunication services and health care proved the
S&P's lagging sectors.
The Nasdaq Composite (RIXF) rose 32.84 points, or 2.2%, to
1,540.72, up 2.1% from a week ago. .
Commodities slide
Crude-oil futures tumbled, with futures for January delivery off
$1.70 to end at $46.28 a barrel on the New York Mercantile
Exchange. Crude posted a weekly gain of $5.47, or 13.4%, from last
Friday's close of $40.81 barrel. .
Elsewhere on Nymex, gold futures closed lower, but posted a
weekly gain of 9%. Gold for February delivery ended $6.10 off at
$820.50 an ounce, leaving it with a weekly advance of $68.3 from
last Friday's close of $752.2 an ounce. .
Late Thursday, Bernard Madoff, former Nasdaq Stock Market
chairman and founder of Bernard L. Madoff Investment Securities
LLC, was arrested and charged with securities fraud in what federal
prosecutors called a Ponzi scheme that could involve losses of more
than $50 billion. .
And, the deluge of industry job cuts spread into the
traditionally defensive gambling sector Friday when Las Vegas Sands
(LVS) announced it would cut 216 full-time employees from its Las
Vegas properties.
Shares of Las Vegas Sands finished up 2.2%.
Volume on the New York Stock Exchange topped 1.4 billion, and
advancers topped decliners 3 to 2. On the Nasdaq, more than 773
million shares changed hands, as advancers overshot decliners 2 to
1.
Early economic data also weighed on equities, with the
government reporting a 1.8% drop in retail sales in November. .
Separately, the Labor Department said U.S. inflation at the
wholesale level declined sharply last month. .
After hitting a 28-year low last month, Consumer sentiment
improved a bit in early December, according to a survey by the
University of Michigan and Reuters. The consumer sentiment index
climbed to 59.1 in December from 55.3 the previous month.
International markets were also hit hard by the collapse of the
auto industry rescue, with Japan's Nikkei 225 tumbling 5.6% .
Similarly, the pan-European Dow Jones Stoxx 600 index fell 3.4%.
.
Ecuador's President Rafael Correa made good on his threat to
default on the country's foreign debt Friday, saying Ecuador will
not make a payment due Dec. 15.
U.S. stocks finished deep in negative territory on Thursday as
fears over the future of the bailout plan mounted and amid renewed
concerns over the health of financial firms.