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Economic reports & merger-and-acquisition buzz failed to ignite investors’ interest in the last session before a long holiday weekend. Stock prices closed at almost flat levels, after a light-volume pre-Christmas session.

Today, the Dow Jones industrial average closed down 6.17 to 10,883.27, the broader Standard & Poor’s 500 index finished up 0.54 to 1,268.66, and the Nasdaq composite index ended up 2.93 or 0.1% to 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%. This was the fourth-straight week when the Nasdaq was lower. The Dow and S&P both ended higher for the second straight week. So far this year, the Dow is up about 1%, the S&P is up about 4.6%, and the Nasdaq has gained about 3.3%.

Market breadth was positive. Volume was unusually light ahead of the Christmas weekend. On the New York Stock Exchange, winners beat losers by 20 to 11 on volume of 940 million shares. On the Nasdaq advancers edged out decliners 15 to 14 as 1 billion shares changed hands.

While the week has been relatively flat, it is expected that with some positive news from retailers, the market would be propelled higher in the final four sessions of the year.

In November, sale of new homes fell 1.3%, the biggest decline in nearly 12 years. This led housing stocks to tumble. D.R. Horton closed down $0.64 to $36.21, and Pulte Homes lost $0.75 to $40.75. The Dow Jones Home Construction index closed down $11.29 or 1.4% to $936.70.

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. This is against the expected rise of 1.5%.

Amongst gainers, IBM closed up $0.26 to $83.48, Boeing gained $0.17 to $71.49,on news that it may get a deal worth $10 billion with Singapore Airlines. Staar Surgical closed up $2.74 or 40% to $8.51, on winning FDA approval of an implantable lens designed to correct nearsightedness in adults. Wyeth closed up $0.71 or 2% to $47.48, and Progenics Pharmaceuticals closed up $2.51 or 12% to $25.60.

Amongst losers, Solectron closed down $0.23 or 75 to $3.61, after declaring that first-quarter profit was cut in half as revenue fell and costs rose. Albertsons closed down $2.74 to $20.54, on breaking off talks to be bought by an investor group.

Bain Capital, a private equity firm, is reportedly in discussions to buy a unit of Texas Instruments. Stock of Texas instruments closed up 1% up $0.21 to $32.93. Online search company Mamma.com closed up $0.55 or 205 to $2.75, after the company agreed to buy Copernic Technologies. Affiliated Computer Services rose $2.92 or 5% to $61.00, after a report that three private-equity firms are in talks to buy the company for $62 a share, or about $8 billion.

Light sweet crude oil for February delivery settled up 15 cents to $58.43 a barrel on the New York Mercantile Exchange.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter