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Stocks closed slightly higher as investors rested on strong weekly gains that came on hope that the Federal Reserve has moved closer to cutting interest rates should the economy weaken too much. News that existing home sales rose also helped soothe immediate concerns about the housing market. However, worries about rising oil prices limited gains.

Today, the Dow closed up 19.87 or 0.16% to 12,481.01, the broader S&P 500 closed up 1.57 or 0.11% to 1,436.11, and the Nasdaq closed down 2.81 or 0.11% to 2,448.93. For the week, the Dow gained 3.1%, the S&P rose 3.6% and the Nasdaq closed up 3.2%.

Market breadth was mixed. On the New York Stock Exchange, winners topped losers 18 to 13 on volume of 1.3 billion shares. On the Nasdaq, advancers topped decliners 15 to 13 on volume of 1.7 billion shares.

While investors were happy with housing news, they also remained cautious about the latest news from Iran. An Iranian naval patrol seized 15 British marines and sailors who had boarded a vessel suspected of smuggling cars off the coast of Iraq. The British government had immediately demanded the safe return of its troops.

On the economy, signs are that we will continue to see the economy slowing. We’re going to see slower earnings growth. While, existing home sales rose 3.9% versus forecasts for a decline, and the gain was the biggest in nearly 3 years, the median price of a home fell for the seventh straight month, a sign that the housing market’s problems are far from over. Economists had looked for a slowdown to a 6.3 million pace.

Shares of Amgen closed down $2.45 or 4% to $58.02, after it cancelled a late-stage trial of its colon cancer treatment after finding that it hurt chances of survival. An interim look at the trial found that colon cancer patients treated only with chemotherapy and Avastin, were more likely to live than patients who also received Vectibix.

Stock of Daimler Chrysler closed up $4.77 to $82.37, on a report that auto parts supplier Magna and a private equity partner may have offered to buy its Chrysler unit for as much as $4.7 billion.

Shares of General Motors closed up $1.63 to $31.95, after saying it will pay stock bonuses to its top executives for the first time since 2003. Chairman and Chief Executive Rick Wagoner received restricted stock valued at $2.8 million and 500,000 options, according to a filing with the SEC.

Stock of Citigroup closed down $0.11 to $51.73, on news that it may be considering a rival offer for Dutch bank ABN Amro, which is already in discussions with British bank Barclays about a potential merger. Barclays has signed an exclusive agreement to negotiate with ABN AMRO and has drawn up a broad merger outline for a combined bank worth more than $166 billion.

U.S. light crude oil for May delivery rose 59 cents to $62.28 a barrel on the New York Mercantile Exchange. A situation in the Persian Gulf contributed to oil worries: 15 British marines were taken captive by Iranian naval vessels.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter
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