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February 28, 2006 > Wall Street ends mixed despite oil, economic worries

Wall Street ends mixed despite oil, economic worries

by Michael J. Martinez

Stocks finished an uneven session mixed Friday as investors grappled with the implications of a terror attack against a Saudi Arabian oil processing plant and a surprising decrease in factory orders. The major indexes also ended the week mixed.

Before the market opened, news reports said two explosives-laden cars attempted to destroy a plant in Buqayq. Although officials said the flow of oil was not halted, the news sent oil prices higher, with a barrel of light crude settling at $62.91, up $2.37, on the New York Mercantile Exchange.

The bombing news came as investors weighed a sharp drop in big-ticket factory orders. The Commerce Department said durable goods orders fell 10.2 percent in January, the biggest drop in 51/2 years and far greater than the 0.2 percent decrease economists expected.

With energy prices rising and the economy slowing, investors' fears of greater inflation, and the Federal Reserve's rate hikes to combat it, have pressured stocks all week. Yet despite the news, analysts were pleased that the markets managed any gains.

"One of the most important signs of a bull market is when the bull market manages very, very bad news like we've had today," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. "So in that sense, you've got a very encouraging performance today."

The Dow Jones industrial average fell 7.37, or 0.07 percent, to 11,061.85.

Broader stock indicators closed modestly higher. The Standard & Poor's 500 index rose 1.64, or 0.13 percent, to 1,289.43, while the Nasdaq composite index gained 7.72, or 0.34 percent, to 2,287.04.

Bonds edged lower, with the yield on the 10-year Treasury note rising to 4.58 percent from 4.56 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.

The markets finished the week narrowly mixed, reflecting the push-pull of optimism and concern Wall Street faces. For now, investors remain fairly confident on the state of the economy, but a series of economic reports next week could provide new insights and worries.

"There's obviously a very bullish sentiment there when you look at the tape," said Brian Williamson, equity trader at The Boston Company Asset Management. "But you know, the volume's a little quiet, and that sentiment can still change in a heartbeat."

For the week, the Dow fell 0.48 percent, while the S&P gained 0.17 percent and the Nadsaq rose 0.21 percent.

Technology shares came under scrutiny after Dow component Intel Corp. was downgraded to "market perform" from "outperform" by Friedman Billings Ramsey and its price target was lowered to $23 per share from $31 per share. The analyst blamed lower demand and increased competition for the downgrade. Intel nonetheless rose 7 cents to $20.36.

Blackberry device maker Research In Motion Ltd. surged $4.52 to $74.05 after a federal judge presiding over a patent dispute did not issue an injunction that would shut down the company's widely-used mobile e-mail services. However, the judge has yet to rule on whether RIM violated another company's patents.

In merger news, British utility National Grid PLC rose $1.40 to $53.45 after it confirmed it was in discussions to purchase U.S. natural gas and electric utility KeySpan Corp. for up to $7.3 billion in cash. KeySpan gained 32 cents to $41.41.

Gap Inc. was among the notable companies that reported earnings late Thursday. The clothing retailer said its fourth-quarter profits slumped slightly, though they still met Wall Street's forecasts. However, sales growth remains sluggish, and Gap shares dropped 67 cents to $18.43.

Time Warner Inc. slid 5 cents to $17.27 after the company said CNN founder Ted Turner would not seek re-election to the media conglomerate's board. Former U.S. Trade Representative Carla Hills is also stepping down as a director.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where final consolidated volume came to 2.12 billion shares, compared with 2.22 billion traded Thursday.

The Russell 2000 index of smaller companies rose 4.15, or 0.57 percent, to 736.60.

Overseas, Japan's Nikkei stock average edged up 0.04 percent. In Europe, Britain's FTSE 100 was up 0.42 percent, France's CAC-40 rose 0.67 percent for the session, and Germany's DAX index gained 0.22 percent in late trading.

The Dow Jones industrials ended the week down 53.47, or 0.48 percent, finishing at 11,061.85. The S&P 500 index added 2.19, or 0.17 percent, to close at 1,289.43.

The Nasdaq rose 4.68, or 0.21 percent, to end at 2,287.04.

The Russell 2000 index closed the week up 5.66, or 0.77 percent, at 736.60.

The Dow Jones Wilshire 5000 Composite Index - a free-float weighted index that measures 5,000 U.S. based companies - ended the week at 13,010.58, up 39.01 points from last week. A year ago, the index was 11,934.05.

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