US stocks enter a new year this week on a cautious note, as investors face rising concerns about the economy and a raft of economic data, including the important monthly employment report.
Wall Street rapidly pulled the plug on the traditional year-end market rally.
Even during the Christmas holiday-shortened week, investors were beset by the demons that have haunted them for several months.
A persistent housing sector crisis and its related credit crunch was spotlighted by a plunge in new home sales.
A sluggish economy eked out a negligible increase in durable goods orders, and an unstable geopolitical environment was rattled anew by the murder of Pakistani opposition leader Benazir Bhutto.
In the last trading week of the year, which included only three and a half sessions, the blue-chip Dow Jones Industrial Average slid 0.63 percent lower to end Friday at 13,365.87 points.
The tech-rich NASDAQ composite fell 0.65 percent to 2,674.46 points and the broad-market Standard & Poor's 500 index lost 0.4 percent at 1,478.49 points.
The bond market attracted investors looking for safer havens.
The yield on the 10-year Treasury bond fell to 4.096 percent from 4.168 percent last Friday, and that of the 30-year Treasury bond slipped to 4.514 percent from 4.575 percent. Bond yields and prices move in opposite directions.
With tomorrow's session the last of this year, the Dow, which in the course of several months had crossed the psychological barriers of 13,000 points, then 14,000 points, has climbed a moderate 7.24 percent this year to date. The 30-company index is 800 points below its record high of 14,164.53 reached on Oct. 9.
The S&P 500, which tracks 500 companies and is considered a better gauge of the market, has added 4.24 percent.
The NASDAQ, benefiting from investors' continued interest in technology, jumped 10.73 percent, lifted by stars such as Google and Amazon.
"Considering the crude [oil] move of US$40 to nearly US$100 and the credit crisis, the market did exceptionally well, considering all that we had to deal with," said Marc Pado, an analyst at Cantor Fitzgerald.
Despite the shortened week ahead because of the New Year's Day holiday on Tuesday, investors will have a series of economic news to digest, including sales of existing homes tomorrow and the employment report for this month on Friday.
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