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Wall Street dips as yen rallies

Associated PressVail CO, Colorado

NEW YORK (AP) — Stocks ticked moderately lower in the final session of a tumultuous week as the yen rallied against the dollar Friday and concerns about the strength of the U.S. economy still weighed on investors following a plunge in stocks early in the week.The Dow industrials, repeating a dynamic of Thursday’s trading, poked tentatively into positive territory several times Friday before retreating as investors tried to shake off their unease.Larger economic concerns such as the ascendent yen have dominated Wall Street for much of the week after Tuesday’s worldwide selloff that sent the Dow industrials down 416 points and rattled investor confidence about the state of the U.S. economy.”Fundamentally, I don’t think a lot has changed this week and I think it’s been more of a psychological re-evaluation of risk and a lot of this is focused around what’s happened in the Asian markets,” said Diane Dercher, chief economist at Waddell & Reed.A well-received profit report from American International Group Inc. helped give a boost to the Dow industrials Friday; the insurer was the biggest advancer among the index’s 30 stocks.In midday trading, the Dow industrials fell 27.55, or 0.23 percent, to 12,206.79.Broader stock indicators were lower. The Standard & Poor’s 500 index fell 4.93, or 0.35 percent, to 1,398.24 and the Nasdaq composite index slid 11.18, or 0.47 percent, to 2,393.03.Bonds rose as economic concerns lingered. The yield on the benchmark 10-year Treasury note falling to 4.53 percent from 4.55 percent late Thursday. Gold prices fell sharply while light, sweet crude rose 12 cents to $62.12.”The market has gone back and forth this week trying to asses all this and it takes some time to work through,” Dercher said.The yen brought some unease on Wall Street, as the dollar fell 0.49 percent to 117.22 yen. Concerns lingered about a decline in the yen carry trade, which refers to the process of borrowing yen to acquire assets with greater yields in other currencies. A slowdown could hurt liquidity worldwide. Concerns about Japanese interest rates also weighed on investors.Investors seemed somewhat cheered by the final Reuters/University of Michigan consumer sentiment reading for February, even as it fell to 91.3 from 96.9 from January. Earlier this week, the Conference Board said its own measure of consumer confidence reached a 5 1/2 year high.With little of the economic data that has at turns boosted and deflated sentiment this week, investors again looked abroad for direction. Performance of overseas markets has taken on renewed importance this week after a nearly 9 percent drop in the Shanghai Composite Index helped touch off the worldwide selling and sent U.S. stocks reeling. The major U.S. indexes each lost more than 3 percent. On Thursday, the major indexes ended lower though they pared sharp losses from early in the session.St. Louis Federal Reserve President William Poole said in remarks prepared for a speech Friday in Santiago, Chile, that rising energy prices wouldn’t necessarily lead to an economic slowdown if monetary policy were laid out carefully.With trading less frenetic than in previous days, investors had some time to parse individual stocks as they looked for bargains.AIG’s fourth-quarter profit rose sharply from a year earlier when the world’s largest insurer spent $1.64 billion to settle charges over its accounting practices. Profits were slightly below Wall Street’s forecast though investors were likely pleased by the company’s announcement it would repurchase $5 billion in stock in 2007. The company also is targeting a 20 percent annual increase in its dividend. AIG rose $2.45, or 3.6 percent, to $69.85.Dell Inc., which had fallen shortly after trading began, rose 32 cents to $23.33 after the computer maker’s profit fell 33 percent amid weak laptop sales. While revenue fell more than expected, the overall results weren’t as sour as some investors had feared.Gap Inc. fell 48 cents, or 2.5 percent, to $18.55 after the company’s fourth-quarter earnings dropped 35 percent amid problems that include its newest chain, which the company plans to close. Investors seemed cheered about a purge in management aimed at turning the clothing chain around.Immersion Corp. surged $1.65, or 23 percent, to $8.88 after the interactive technology developer settled a patent-infringement suit with Sony Corp. Immersion expects to receive $97.2 million in damages and $22.5 million in licensing payments. The company reported 2006 revenue of $27.9 million late Thursday.Kohl’s Corp. rose $3.79, or 5.6 percent, to $71.32 after the retailer’s fourth-quarter earnings jumped 29.3 percent as sales of in-house brands increased.A U.S. arm of Zurich Financial Services AG, the Swiss insurer, agreed to acquire Bristol West Holdings Inc. for around $712 million. Bristol rose $5.77, or 35.6 percent, to $21.98.Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 680.8 million shares and remained lighter than any time since Tuesday.The Russell 2000 index of smaller companies fell 4.21, or 0.53 percent, to 786.82.Overseas, Japan’s Nikkei stock average closed down 1.35 percent, while the Shanghai Composite Index was up 1.23 percent and Hong Kong’s Hang Seng index added 0.49 percent. Britain’s FTSE 100 finished higher by less than 0.01 percent, Germany’s DAX index fell 0.56 percent, and France’s CAC-40 slid 0.62 percent.—On the Net:New York Stock Exchange: http://www.nyse.comNasdaq Stock Market: http://www.nasdaq.com


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