US stocks end mixed after sharp drop in home sales

The Commerce Department report that new home sales fell 9% from October to a seasonally adjusted annual rate of 647,000.

Wall Street finished an erratic week narrowly mixed Friday after a government report of a steep decline in new home sales stirred concerns that weakness in housing will continue to dog the economy. The major indexes lost ground for the week. The Commerce Department report that new home sales fell 9 percent from October to a seasonally adjusted annual rate of 647,000 triggered renewed nervousness that consumers could become uneasy and tamp down their spending. Stocks, which fell more than 1% Thursday following unwelcome economic readings and the assassination of Pakistani opposition leader Benazir Bhutto, fluctuated through the day Friday. The Chicago purchasing managers' index had for a time offered some support to investor sentiment Friday after it showed a stronger-than-expected increase for December manufacturing activity in the Midwest. The Dow Jones industrial average rose 6.26, or 0.05 percent, to 13,365.87, after bobbing higher and lower throughout the session. Broader stock indicators were mixed. The Standard & Poor's 500 index rose 2.12, or 0.14%, to 1,478.49, and the Nasdaq composite index fell 2.33, or 0.09%, to 2,674.46. For the week, the Dow lost 0.63%, the S&P 500 slid 0.65% and the Nasdaq fell 0.55%. The indexes are going into the final trading session of 2007 with decent gains: The Dow is up 902.72, or 7.24%, while the S&P 500 is up 60.19, or 4.24% and the Nasdaq is up 259.17, or 10.73%. This week saw the kind of choppy trading that is now typical in the stock market. Wall Street was lifted Monday by news of a $6.2 billion in Merrill Lynch & Co., a welcome development given the financial sector's continuing problems from the mortgage and credit crisis. But by Thursday, those gains were gone, wiped out as world political events reminded investors of the problems that still exist beyond the economic uncertainties in the US Advancing issues narrowly outnumbered decliners on the New York Stock Exchange. Consolidated volume came to 2.31 billion shares, up from 2.27 billion shares Thursday. Bond prices rose sharply as investors looked for the assurances of US-backed investments. The yield on the 10-year Treasury note, which moves opposite its price, fell to 4.12% from 4.19% late Thursday. The dollar was lower against most other major currencies, while gold prices rose. Light, sweet crude fell 62 cents to settle at $96 per barrel on the New York Mercantile Exchange. Rising prices in recent days have renewed talk of breaching the psychological benchmark of $100. Oil hit a peak of $99.29 on November 21. The pace of sales of new homes in November proved much weaker than economists had been expecting. Wall Street had predicted sales would drop about 1.8% to a pace of 715,000. In a more optimistic sign for the economy, the purchasing managers index, considered a precursor of the national Institute for Supply Management report being released Wednesday, rose to 56.6 from 52.9 in November. Economists, on average, had been expecting a showing of 52.0, according to Dow Jones Newswires. But the Chicago PMI's December employment index fell to 49.0 from 54.4 in the prior month. Wall Street regards solid employment as the crucial underpinning of the economy's well-being because it feeds consumer spending, which accounts for more than two-thirds of US economic activity. In corporate news, a New York state regulator said Warren Buffett's Berkshire Hathaway will receive a license to open a bond insurance business in the state. Berkshire Hathaway said Friday it agreed to buy NRG N.V., the reinsurance unit of ING Group said for about $435.7 million in cash. Genesco Inc. jumped $5.44, or 16.5%, to $38.50 after a judge ruled The Finish Line Inc. cannot back out of its $1.5 billion purchase of Genesco. Finish Line fell 75 cents, or 24.6%, to $2.30. The Russell 2000 index of smaller companies fell 1.75, or 0.23%, to 771.76. Overseas, Japan's Nikkei stock average fell 1.65%. Britain's FTSE 100 fell 0.32% and France's CAC-40 ended essentially flat. The Dow Jones industrial average ended the week down 84.78, or 0.63%, at 13,365.87. The Standard & Poor's 500 index finished down 5.97, or 0.40%, at 1,478.49. The Nasdaq composite index ended down 17.53, or 0.65%, at 2,674.46. The Russell 2000 index finished the week down 13.84, or 1.76%, at 771.76. The Dow Jones Wilshire 5000 Composite Index - a free-float weighted index that measures 5,000 US-based companies - ended Friday at 14,911.63, down 67.64 points, or 0.45%, for the week. A year ago, the index was at 14,324.84.