Stocks end week lower after early gains fade

Updated: 7:34 p.m. ET.

Stocks ended the day mostly higher, though not a lot higher, despite never-ending worries about Europe. The major averages ended lower for the week after two weeks of gains.

It was not a day of enthusiasm. After a strong open, the major indexes quickly began paring their gains. The Dow Jones industrials ($INDU) saw a 99-point gain turn into a small loss, with IBM (IBM) the biggest contributor to the loss.

Some of the pullback may have been due to options expirations. But European fears were probably the larger issue, especially after Fitch Ratings downgraded six European countries and said France could lose its AAA rating.

At the same time, shares of social games developer Zynga (ZNGA) disappointed many hoping for big gains on their first day of trading. The shares, which went public at $10 late Thursday and hit $11.50 soon after trading began, ended down 50 cents at $9.50.

The Dow closed down 2 points to 11,866. The Standard & Poor's 500 Index ($INX) ended up 4 points at 1,220. The index had been as high as 1,231. The Nasdaq Composite Index ($COMPX) was up 13 points to 2,555; it had been up as many as 44 points.

Article continues below.
You can name your reason for why stocks got off to a strong start today. We'll try three: Inflation is tamer than earlier in the year. The domestic economy has been showing more strength than expected.  And, for today, anyway, commodity prices were higher -- especially copper (-HG).

The mediocre performance came on a quadruple-witching day, which often produces abnormal volatility, particularly at the close. Many futures contracts expire today, as well as options on futures and options on stocks and on stock indexes. 

You could see the volatility in shares of Groupon (GRPN), which were up as much as 8% to $25.15 just before the close and ended at $23.04, down 4 cents.

The Dow ended the week down about 2.6%, with the S&P 500 down 2% and the Nasdaq down 3.5%. For the month, the Dow is off 1.5%, with the S&P 500 off 2.2% and the Nasdaq down 2.5%.

What all that means is that 2011 will be a year to forget for stocks. The Dow is up 2.5%, but the S&P 500 is down 3%. The Nasdaq is down 3.7%.

But remember, things could be worse. The Dow fell 34% in 2008.

Markets for the week
			12/16/2011			12/9/2011			% chg.			YTD chg.
Dow Industrials			11,866.39			12,184.26			-2.61%			2.50%
S&P 500			1,219.66			1,255.19			-2.83%			-3.02%
Nasdaq			2,555.33			2,646.85			-3.46%			-3.68%
Russell 2000			722.05			745.40			-3.13%			-7.86%
Crude oil			$93.53			$99.41			-5.91%			2.35%
(per barrel)
U.S. Dollar Index			80.25			78.68			1.99%			1.21%
10-yr. Treasury			1.85%			2.05%			-9.65%			-43.90%
Gold			$1,597.90			1,716.80			-6.93%			12.42%

Copper moves higher
Copper settled up 6.4 cents to $3.331 a pound, but it had risen to $3.3775 before its gains were tempered as the euro drifted lower against the dollar. 

The euro was at $1.3033 this afternoon, up slightly from Thursday and but off 2.6% for the week.

Gold (-GC) settled up $20.70 to $1,597.90 an ounce. Silver (-SI)  was up 39.7 cents to $29.671 an ounce. For the week, gold was off 6.9%; silver fell 8%.

Crude oil (-CL) settled down 34 cents to $93.95 a barrel in New York. It had been as low as $92.52. Brent crude for February delivery was off 25 cents to $103.35. That reflects the worries about economies in Europe. For the week, light sweet crude in the States was down 5.9%; Brent fell 4.9%.

The retail national price for unleaded gasoline was $3.25 today, according to AAA's Daily Fuel Gauge Report. That was down slightly from Thursday and off 18.4% from its peak in early May. Gasoline is is still up 16.4% for the year.

Interest rates were lower, with the 10-year Treasury yield falling to 1.854% from Thursday's 1.913% and 3.31% at the end of 2010.

Energy prices -- New York close
			Fri.			Thur.			Month chg.			YTD chg.
Crude oil (-CL)			$93.53			$93.87			-6.81%			2.35%
(per barrel)
Heating oil (-HO)			$2.8005			$2.8225			-7.42%			10.10%
(per gallon)
Natural gas (-NG)			$3.1270			$3.1270			-11.92%			-29.01%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.4870			$2.4877			-2.79%			1.38%
(per gallon)
Brent crude			$103.35			$103.60			-6.49%			9.08%
(per barrel)
Retail gasoline			$3.2500			$3.2590			-1.37%			5.79%
(per gallon; AAA)

CPI is unchanged
The consumer price index was unchanged in November after falling 0.1% in October. Economists expected to see a 0.1% increase, the Labor Department said. Excluding food and energy costs, the index rose 0.2%, slightly higher than expectations of a 0.1% gain.

While that sounds great, Nomura Securities noted today, the move by many people to rent homes rather than buy has put pressure on rents and is pressuring overall housing costs.

Meanwhile, Fitch Investors said it may downgrade the debt of six European countries -- Italy, Spain, Ireland, Belgium, Slovenia and Cyprus. After last week's European Union summit, The ratings firm said it "has concluded that a 'comprehensive solution' to the eurozone crisis is technically and politically beyond reach."

Standard & Poor’s said that failure by European leaders to resolve the debt crisis "could lead to a more pronounced economic downturn." It also said that net exporting euro nations Netherlands, Germany, Belgium, Austria, and Finland face a risk of a bigger contraction than net importers from "deteriorating external demand."

European car sales fell the most in five months in November, the Brussels-based European Automobile Manufacturers Association said today. Ireland’s economy shrank 1.9 percent in the third quarter, the most in more than two years, according to a separate report.

Meanwhile, Fitch downgraded stocks of eight giant banking companies: Bank of America (BAC), Barclays (BCS), BNP Paribas (BNPQY), Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), Morgan Stanley (MS) and Societe Generale (SCGLY). All but Societe Generale were down on the day.

The KBW Bank Index ($BKX), which tracks U.S. banks, was up slightly to 37.71.

Home Depot, Microsoft lead the Dow
Twenty of the 30 Dow stocks were higher, led by Home Depot (HD) and Microsoft (MSFT). The laggard was IBM, down $3.91 to $183.57. That subtracted about 30 points from the blue-chip index. IBM's shares are down more than 6% this week. (Microsoft is the publisher of MSN Money.)

Sixty-nine Nasdaq-100 ($NDX) stocks were higher, led by Vertex Pharmaceuticals (VRTX) and Adobe Systems (ADBE). The index, which tracks the largest Nasdaq stocks, was up 11 points to 2,238.

About 310 S&P 500 stocks were higher, led by Adobe and Cameron International (CAM).

Ugly day for Research In Motion
The misery continued for BlackBerry maker Research In Motion (RIMM), with shares down $1.69 to $13.44. The shares had traded as low as $13.12, their lowest level since January 2004. The stock was the worst performer among Nasdaq-100 stocks.

Yes, the company beat Wall Street's expectations for its fiscal third-quarter but offered a disappointing outlook. Worse, it said a new generation of BlackBerries, critical to its future, won't be available until the fall of 2012.

"The last few quarters have been some of the most trying in the history of this company," RIM co-CEO Jim Balsillie said during an earnings call with analysts on Thursday. "We understand shareholders may feel like we let them down."

Adobe earnings cheer
Shares of Adobe Systems, the graphics design software developer, were up $1.74 to $28.20. The company posted above-consensus results for its fiscal fourth quarter. Adobe earned 67 cents a share on sales of $1.15 billion in the three months ended Dec. 2, better than the consensus estimate of 60 cents in earnings and $1.09 billion in sales. Adobe sees non-GAAP profit ranging from 54 cents to 59 cents a share for its fiscal first quarter and $2.37 to $2.47 a share for the full year. Wall Street sees 58 cents and $2.44.

United Rentals (URI) agreed to buy rival rental equipment maker RSC Holdings (RRR) for about $1.9 billion in cash and stock. United Rentals will buy RSC for $18 a share, a 58% premium to RSC's Thursday's close of $11.37. Wall Street loves the deal. RSC was up $6.58 to $17.95. United Rentals was up $1.85 to $27.89.

Darden Restaurants (DRI) shares were off 6 cents to $43.68. The owner of Olive Garden and Red Lobster restaurants earned $54.1 million, or 41 cents a share, from continuing operations in the fiscal-second quarter. That's down from year-earlier earnings of $75.8 million, or 54 cents, a year earlier. Sales were $1.83 billion, up from $1.73 billion last year. The Street had expected earnings of 41 cents. a share in the quarter.

Cablevision (CVC) shares were down $1.18 to $12.75 on news that chief operating officer, Tom Rutledge, plans to resign this month. The company didn't provide a reason for his departure. Rutledge has long been seen as a potential CEO of another cable or satellite operator.

Cameron International,maker of the unfortunate blowout preventer that failed in the 2010 BP oil spill, jumped $2.69 to $47.55 after agreeing to pay BP (BP) $250 million. With the deal, Cameron is not responsible for further cleanup costs from the nation's worst offshore oil spill. BP was unchanged at $41.39.

Short hits from the markets -- New York close
			Fri.			Thur.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0300%			0.110%			200.00%			-75.00%
5-year Treasury note			0.814%			0.854%			-14.50%			-59.62%
10-year Treasury note			1.854%			1.913%			-10.35%			-43.90%
30-year Treasury bond			2.855%			2.926%			-6.76%			-34.55%
Currencies
U.S. Dollar Index			80.249			80.341			2.24%			1.21%
British pound			1.5588			1.5588			-0.61%			-0.11%
(in U.S. $)
U.S. $ in pounds			£0.642			£0.642			0.61%			0.11%
Euro in dollars			$1.3043			$1.3018			-2.96%			-2.52%
(in U.S. $)
U.S. $ in euros			€ 0.759			€ 0.759			1.96%			1.50%
U.S. $ in yen			78.06			77.95			0.31%			-4.06%
U.S. $ in Chinese			6.39			6.36			-0.07%			-3.47%
yuan
Canada dollar			$0.974			$0.000			-0.75%			-2.95%
(in U.S. $)
U.S. dollar			$1.028			$1.027			0.74%			3.03%
(in Canadian $)
Commodities
Gold (-GC)			$1,597.90			$1,577.20			-8.71%			12.42%
(per troy ounce)
Copper (-HG)			$3.331			$3.267			-6.84%			-25.10%
(per pound)
Silver (-SI)			$29.6710			$29.2740			-9.55%			-4.09%
(per troy ounce)
Wheat (-ZW)			$5.8375			$5.7925			-4.93%			-26.50%
(per bushel)
Corn (-ZC)			$5.8300			$5.79			-4.11%			-6.35%
(per bushel)
Cotton			$0.8593			0.8586			-5.48%			-40.66%
(per pound)
Coffee			$2.1510			2.1775			-9.20%			-10.56%
(per pound)
Crude oil (-CL)			$93.53			$93.87			-6.81%			2.35%
(per barrel)