Little change on Wall Street

US stocks were little changed today as a slowdown in retail sales and profit warnings from Lucent Technologies and Tyco International Ltd. Kept Wall Street investors from building on earlier gains. The major indexes finished the week flat.

Better-than-expected wholesale inflation figures gave Wall Street some hope of extending its New Year’s advance, but Michael Sheldon, chief market strategist at Spencer Clarke LLC, attributed the listless trading mostly to an overbought market.

Stocks surged to fresh four-and-a-half year highs this week.

Coupled with lacklustre earnings from Dow Jones industrials Alcoa and DuPont earlier in the week, “investors face an uphill battle in trying to push stock prices higher”, Sheldon said.

“Overall, the tone of the market remains positive, but we could easily see a bit of profit taking or consolidation before stocks start to head higher again later this month.”

Investors have turned much of their attention to the fourth-quarter earnings season, which kicks into full swing on Tuesday. They will be looking for signs of whether trouble lays ahead on the economic or corporate fronts.

The Dow lost 2.49, or 0.02%, to 10,959.87.

Earlier this week, the Dow topped 11,000 for the first time since June 2001, closing on Wednesday at a four-and-half year high of 11,043.44.

Broader stock indicators were also off highs reached this week. The Standard & Poor’s 500 index finished up 1.55, or 0.12%, at 1,287.61, and the Nasdaq composite index rose 0.35, or 0.02%, to close at 2,317.04.

The yield on the 10-year Treasury note fell to 4.36% from 4.41% late on Thursday. The dollar was mixed against most major currencies, while gold prices edged upward.

The US markets will be closed on Monday for Martin Luther King Day.

Crude futures pared earlier losses while natural gas continued sliding. A barrel of light crude fell 2 cents to settle at US$63.92 (€52.64) on the New York Mercantile Exchange, where natural gas lost 15.2 cents to US$8.791 (€7.24) per 1,000 cubic feet.

Traders were optimistic about a Labour Department report that its core producer price index grew just 0.1% in December, less than the 0.2% rise forecast by economists. While overall PPI growth surged 0.9%, traders were likely comforted by a second straight monthly decline in crude material prices, Sheldon said. The inflation data – a precursor to consumer-level increases – tempered a drop in monthly retail sales growth, which slowed to 0.7% and missed economists’ targeted gain of 1%, the Commerce Department said.

Over the next several weeks, investors will be focused on quarterly earnings while keeping a close watch on the Federal Reserve’s actions at its January 31 meeting, said Jack Caffrey, equities strategist for JPMorgan Private Bank.

“It’s not just what you deliver, but what your future is likely to hold,” Caffrey said of the earnings reports. “I feel like there is a lot of one-time noise in earnings. That’s going to create volatility for some stocks.”

A sharp selloff on Thursday gave back most of the market’s gains this week, with the Dow rising 0.01%, the S&P 500 gaining 0.17% and the Nasdaq up 0.5% for the week.

In corporate news, Lucent said its annual revenue growth would be slower than previously forecast because of lagging sales in the US and China. Lucent fell 6 cents to 2.65.

Tyco confirmed a rumoured move to split its security, electronics and healthcare businesses into three public units, but warned that its first-quarter and yearly earnings would miss prior estimates. Its shares sank 3.19 to 27.12.

In acquisition news, Boston Scientific came back with a US$24.9bn (€20.51bn) bid - increased by US$330m (€271.77m) – for Guidant, which on Thursday accepted Johnson & Johnson’s US$23.2bn (€19.11bn) offer. Boston Scientific rose 15 cents to 25.20 and Guidant added 44 cents to 70.84, while J&J dropped 39 cents to 61.82.

General Motors said it expects US$4bn (€3.29bn) of savings this year from restructuring measures aimed at lowering annual structural costs by US$6bn (€4.94bn) and material expenses by US$1bn (€0.82bn). GM nonetheless slid 59 cents to 20.37.

Late on Thursday, IBM said the Securities and Exchange Commission has opened a formal probe into the company’s forecast for stock-option expenses in the first quarter of 2005. IBM dropped 40 cents to 83.17.

Advancing issues led decliners by 6 to 5 on the New York Stock Exchange, where volume of US$1.57bn (€1.29bn) shares lagged behind the US$1.74bn (€1.43bn) shares that changed hands on Thursday.

The Russell 2000 index of smaller companies gained 1.65, or 0.23%, to 708.44. Wall Street’s 2006 rally carried the Russell 2000 above the 700 level for the first time on Monday.