Wall Street ends mixed

Wall Street closed a volatile week with a mixed performance after a pair of economic reports dashed hopes for an early interest rate cut.

Stocks found some late-day strength as investors sought bargains after a two-day pullback that erased most of the gains made so far this year.

Strong results from Microsoft helped lift technology stocks, while heavy machinery maker Caterpillar lent some support to the Dow Jones industrials. However, those gains were offset by economic reports that raised concerns about interest rates.

The Commerce Department said new home sales rose 4.8% in December, well above economists' projections and a sign that the slumping housing market might have bottomed out. The department also said orders to US factories for big-ticket manufactured goods rose in December by the largest amount in three months, led by demand for commercial aircraft.

Investors had been holding on to hopes that central bankers might cut rates in the first half of the year.

The Dow Jones industrial average fell 15.54, or 0.12%, to 12,487.02. Broader stock indicators were mixed. The Standard & Poor's 500 index was down 1.72, or 0.12%, at 1,422.18, and the Nasdaq composite index rose 1.25, or 0.05%, to 2,435.49. For the week, the Dow was down 0.62%, while the S&P lost 0.58% and the Nasdaq fell 0.65%.

Caterpillar, whose earnings are heavily tracked as an indication about the pace of US construction, rose $1.46, or 2.5%, to $61.09 after it reported a 4.3% rise in fourth-quarter profit. The company also stuck by its full year forecast, which it believes will show continued strength in industries like mining, oil and gas.

Honeywell International, a diversified high-tech manufacturer, reported fourth-quarter profit jumped 14%. However, lacklustre 2007 projections sent shares down 7 cents to $44.13.

Meanwhile, technology stocks rose after Microsoft reported second-quarter results beat Wall Street expectations, and projected double-digit growth in all of its core businesses through the rest of the fiscal year that ends June 30. Strong sales of its Xbox video game console helped offset the delayed release of its latest operating system, Vista. Microsoft, which hit a 52-week high in the previous session, rose 15 cents to $30.60.

Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume totalled 1.51 billion shares. The Russell 2000 index of smaller companies rose 3.95, or 0.50%, to 788.14.