Stocks Mixed on Housing Data

NEW YORK - Stocks were narrowly mixed Friday after strong advances all week and after the Commerce Department reported that housing construction fell to its lowest level in more than six years.

Blue chip stocks came off their lows of the session and inched higher Friday. The move follows five straight sessions of advances for stocks during which the Dow Jones industrials logged three consecutive record closes this week. Heading into Friday's trading, the major indexes were up at least 1 percent for the week, with the Nasdaq leading the way with a gain of nearly 2.5 percent.

Todd Leone, managing director of equity trading at Cowen & Co., said markets were reacting to the weaker-than-expected housing data but regardless were in need of a break given the recent advances.

"The market is acting tremendously," he said. "I'd like to see a sell-off and we've been getting a little too bullish."

In midday trading, the Dow was up 5.28, or 0.04 percent, at 12,311.10.

Broader stock indicators fell. The Standard & Poor's 500 index was down 1.63, or 0.12 percent, at 1,398.13, and the Nasdaq composite index was down 10.30, or 0.42 percent, at 2,438.76.

Stocks in the energy sector helped elevate stocks.

Bonds rallied, with the yield on the benchmark 10-year Treasury note falling to 4.61 percent from 4.67 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 31 cents to $55.95 a barrel on the New York Mercantile Exchange. Oil has fallen sharply in recent days - it settled at its lowest level in a year Thursday - as traders have grown concerned slumping demand would outweigh production cuts.

While investors were well aware of a slowdown in the housing market, the figures on housing starts showed a precipitous decline. Construction of single-family homes and apartments fell to an annual level of 1.486 million units last month, a 14.6 percent decline from September.

An eagerly anticipated initial public offering, that of New York Mercantile Exchange parent Nymex Holdings Inc., occurred Friday with shares opening at $120 and recently trading at $135.77 after rising as high as $152. The offering of the 134-year-old commodities exchange had been priced at $59 per share, already higher than earlier estimates, as investors cheer strength in the energy and metals markets. The higher opening makes it the biggest gainer for an IPO on the NYSE this year.

Leone contends that the markets have been re-energized by the spate of buyout announcements in recent weeks, such as those for Clear Channel Communications Inc. and Reader's Digest Association Inc. on Thursday. "That just reprices the market. That tells you stocks are worth more than we ever thought."

Still, he would like to see investors catch their breath so stocks don't become overbought. "Long term it scares me a little bit but short term I think we'll continue to move higher."

In corporate news, Starbucks Corp. posted a 5 percent drop in its fiscal fourth-quarter profit, though the coffee retailer's profit met Wall Street's expectations. The stock, which had risen 7 percent since last week, fell $2.50, or 6.3 percent, to $36.93 as investors grew concerned about issues such as labor costs.

Foot Locker Inc., the athletic footwear retailer, fell $1.12, or 4.7 percent, to $22.79, after reporting a 2 percent decline in its third-quarter profit.

Advanced Magnetics Inc. jumped $10.25, or 23.4 percent, to $54.15 after the maker of components used in MRI tests reported promising results from a late-stage clinical trial for an iron-replacement therapy for chronic kidney disease patients.

HB Fuller Co. advanced $1.90, or 7.5 percent, to $27.18 after JP Morgan said the maker of adhesives and coatings was likely to benefit from lower costs for raw materials.

The Russell 2000 index of smaller companies was down 3.98, or 0.50 percent, at 786.77.

Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to 774.8 million shares, compared with 752.8 million traded at the same point Thursday.

Overseas, Japan's Nikkei stock average closed down 0.45 percent. Britain's FTSE 100 closed down 1.01 percent, while Germany's DAX index was down 0.48 percent, and France's CAC-40 finished down 1.20 percent.

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