Stocks End Mixed; Dollar Rallies Again

Stocks ended mixed in uninspired trading Friday as some investors stepped back ahead of the Federal Reserve’s meeting Tuesday.

A surge in home builders’ shares, a sharp drop in oil and a dividend increase by General Electric helped boost the mood on Wall Street, but that was offset by a bigger-than-expected jump in U.S. producer prices.

The dollar recovered further ground against the euro and the yen, making its third consecutive day of gains as traders pulled back from weeks of pushing the greenback lower.

The euro fell to $1.323 in New York from $1.332 on Thursday.

“We are seeing a clear correction of the euro against the dollar,” said Christoph Mueller, an economist at DZ Bank in Frankfurt. “People were expecting it to climb above $1.35, and that didn’t happen.”

Against the yen, the dollar rose to 105.14 from 104.50 on Thursday as investors focused on weak economic data from Japan in recent days. The dollar has jumped from 102.09 yen a week ago.

On Wall Street, key indexes traded in narrow ranges all day before ending modestly lower. The Dow Jones industrial average eased 9.60 points, or 0.1%, to 10,543.22.

The market couldn’t get much traction even as near-term crude oil futures in New York slid 4.3% to $40.71 a barrel, the first close below $41 since July.

Some traders said the Labor Department’s report that producer prices rose 0.5% in November, more than expected, triggered concern that the Federal Reserve might have to tighten credit at a faster pace in 2005.

Policymakers meet Tuesday and are expected to raise their key short-term rate from 2% to 2.25%, the fifth increase of 2004.

Broader market indexes dipped along with the Dow. The Standard & Poor’s 500 lost 1.24 points, or 0.1%, to 1,188.00, and the Nasdaq composite slipped 0.94 point, or less than 0.1%, to 2,128.07.

But rising stocks outnumbered losers on the New York Stock Exchange and on Nasdaq.

The week’s trading was marked by wide swings in oil prices and mixed economic data that left many investors feeling uncertain about a year-end rally. For the five days, the Dow lost 0.5%, the S&P; gave up 0.3% and Nasdaq fell 0.9%.

But Treasury bond yields ended the week lower as the strengthening dollar allayed fears that foreign investors might bail out of U.S. bonds.

The 10-year T-note yield edged down to 4.15% from 4.17% on Thursday. The yield had been 4.41% on Dec. 2.

In other market highlights:

* GE said it was boosting its quarterly dividend by 10% and earmarking up to $15 billion to repurchase its stock over the next three years. The company’s shares rose 67 cents to $36.69 and are up 18.4% year to date.

* Shares of home builders jumped, adding to recent gains, after Banc of America Securities initiated coverage of nine companies in the sector. Los Angeles-based KB Home shot up $5.56 to $101.84, Toll Bros. rose $3.01 to $64 and Hovnanian Enterprises leaped $4.25 to $46.35.

* HMO stocks attracted buyers. WellPoint rallied $4.85 to $113.10, PacifiCare Health gained $1.55 to $53.20 and Amerigroup rose $1.16 to $73.91.

* Some Internet-related shares were hit by selling. Google lost $1.78 to $171.65 and Amazon.com was off 77 cents to $39.05.

* Energy stocks were broadly lower. BP slid 80 cents to $58.36, Encana fell $1.09 to $52.66 and Noble Energy lost $1.15 to $59.01.

But natural gas exploration firm Bill Barrett jumped from its initial offering price of $25 to $29.05 on its first day of trading.

* Among other IPOs, Community Bancorp, a Las Vegas-based bank, rose from $23 to $29.35 on its first day of trading.