By Leslie Wines, MarketWatch
Dec 23, 2005
U.S. stock prices closed at almost flat levels Friday, after a
light-volume pre-Christmas session enlivened chiefly by merger news, such
as a raised $4.2 billion bid from European steelmaker Arcelor for Canada's
Dofasco and Apax Partners' $1.6 billion agreement to buy Tommy Hilfiger.
The Dow Jones Industrial Average closed down 6.17 points at 10,883.27.
The S&P 500 ended up 0.54 point at 1,268.66 and the Nasdaq Composite up
2.93 points at 2,249.42.
For the week, the Dow Jones Industrials and the S&P 500 both gained 0.1%,
while the Nasdaq Composite dropped 0.1%.
Volume was unusually light ahead of the Christmas weekend; about 938
million shares traded on the New York Stock Exchange, contrasting with
average daily volume for the year through November of 1.6 billion shares a
day.
The lowest volume session of 2005 for the NYSE took place on Nov. 25, the
day after Thanksgiving, when just 545 million shares were traded in a
half-day session.
There were 20 rising shares for every 11 falling stocks on the NYSE
Friday.
In the Nasdaq market, more than 989 million shares were traded, with 15
advancing stocks for every 14 declining shares.
Given the thin preholiday volume, strategists cautioned against making too
much of the day's market action.
Stock prices fluctuated between small losses and minor gains, as analysts
debated whether the vigorous year-end rally seen in November has resumed.
"The Santa Claus rally is clearly underway. I expect to see the bulls
carry the averages to new 4 1/2 year highs right into next Friday's
close," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
However, other analysts consider market direction uncertain and are
cautioning investors against making bold moves between now and the end of
the year.
"In my experience the market doesn't remain trapped in that kind of narrow
trading range for long," said Ken Tower, chief market strategist at Cyber
Trader. "So expect the market to break out. But which way?"
Early Friday, the Commerce Department said new orders for U.S. durable
goods increased 4.4% in November to a record high $223 billion, pushed
higher by aircraft orders.
The gain in November orders was much larger than expected. Economists were
expecting orders to rise 1.5%, according to a survey conducted by
MarketWatch.
The University of Michigan's December consumer sentiment survey came in
with a final reading of 91.5 points. The MarketWatch forecast, based on a
poll of economists, was for an unchanged reading of 88.7.
The Commerce Department reported that sales of new homes fell 11.3% in
November after surging to a record in October.
Crude futures spent the session well below the psychologically critical
$60 a barrel level. The front-month contract closed up 15 cents at $58.43
a barrel.
Gold futures closed at $505.20 an ounce, up 20 cents on the session.
Analysts expect the contract to hover near $500 an ounce for the remainder
of the year, then test the $600 level in 2006.
The dollar initially shot higher after the news of the much
bigger-than-expected jump in durable goods orders, but then backed off. It
last was down 0.5% at 116.21 yen. The euro was up 0.01% at $1.1871.
The Treasurys market strengthened after the durable goods report as
investors there focused on the durable goods total excluding the orders
for aircraft -- rather than focusing on the robust headline figure.
Excluding aircraft and other transportation orders, durable goods orders
fell 0.6% in November, the third straight monthly drop.
The 10-year benchmark note closed up 15/32 at 101-1/32 with a yield of
4.37%.
Stocks in action
Shares of Albertson's caved in 11.7% to $20.54 after a deal to buy the
struggling supermarket operator fell apart.
Boeing, a Dow component, ended up 17 cents at $71.49, after earlier
striking an all-time high of $72.05, on the back of a media report that it
may edge out Airbus to win deal worth more than $10 billion with Singapore
Airlines.
Shares of Tommy Hilfiger closed unchanged at $16 after the news private
equity firm Apax Partners will buy it. Tommy Hilfiger put itself up for
sale earlier in the year.
Steel stocks were in focus after the news that Arcelor's $4.2 billion
offer for Dofasco topped an offer from Germany's ThyssenKrupp.
The ThyssenKrupp bid was unanimously recommended by the Dofasco board.
Among steel shares trading in the U.S., U.S. Steel rose almost 2% to
$47.50.
In other merger news, The Wall Street Journal reported that buyout firm
Bain Capital is in talks to buy the sensors and controls business of Texas
Instruments.
Texas Instruments stock closed up 21 cents at $32.93.
This MarketWatch update is provided courtesy of Thomson Financial.
This is Thomson Financial's Market Commentary, which is issued three times
daily; Pre-Open (9:00 a.m.), Post-Open (10:15 a.m.), and Close (5:00 p.m.).
The information herein is believed to be true and accurate. We take no
responsibility for inaccurate information and reserve the right to
update our reports. If you have any questions please e-mail James Sang at
james.sang@tfn.com or call 646.822.6233. For more information about
Thomson Financial visit us on-line at http://www.thomsonfinancial.com. For
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http://www.irchannel.com.
SOURCE Thomson Financial Corporate Group
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