(Agencies)
Updated: 2008-01-12 11:58

Broader stock indicators also declined. The Standard & Poor's 500 index fell 19.31, or 1.36 percent, to 1,401.02, and the Nasdaq composite index fell 48.58, or 1.95 percent, to 2,439.94.

Stocks have skidded lower in the new year, with the Dow often falling by triple digits in a single session amid anxiety about a possible recession as well as the still-unfolding fallout from the mortgage crisis.

The Dow is down 4.96 percent for the year, the S&P is off 4.59 percent, and the Nasdaq has lost 8.01 percent.

Bond prices rose as stocks retreated. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.79 percent late Friday from 3.88 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose to a fresh record.

Oil prices were pressured by gains for the dollar against the euro and pound. Crude oil is a dollar-denominated commodity and tends to decline in value when the dollar rises.This is because it takes less money to but the same amount. A barrel of light, sweet crude for February settled down $1.02 at $92.69 on the New York Mercantile Exchange.

Washington Mutual Inc. jumped 53 cents, or 3.7 percent, to $14.69 after CNBC reported JP Morgan is in talks to acquire the nation's largest savings and loan. JP Morgan fell 47 cents to $40.86.

Bank of America fell 80 cents, or 2 percent, to $38.50, while Countrywide fell $1.42, or 18 percent, to $6.33.

American Express fell $4.92, or 10.1 percent, to $44 and was by far the biggest decliner among the 30 stocks that comprise the Dow industrials. McDonald's Corp., also part of the Dow, fell $3.85, or 6.6 percent, to $54.32 after a Friedman Billings Ramsay analyst expressed doubt about the company's future earnings.

Traders showed little reaction to a Commerce Department report that higher energy prices drove the nation's trade deficit in November to its highest level in more than a year. The government said the gap shot up 9.3 percent to $63.1 billion, the widest since September 2006 and up from $57.8 billion in October. Economists surveyed by Thomson/IFR Markets forecast a trade gap of $58.6 billion.

Separately, there was good news on inflation in December, when import prices were unchanged, the Labor Department said.

Federal Reserve Governor Frederic Mishkin said the Fed will act decisively to counter risks to the economy and added that swift rate cuts can hasten the economy's return to normal. But Mishkin also said the financial markets are overly focused on the central bank's actions.

Boston Fed President Eric Rosengren said housing price declines could accelerate this year if the economy is not strong. Mishkin and Rosengren follow Fed Chairman Ben Bernanke, who on Thursday made clear in a speech that the central bank is poised to cut interest rates later this month.

Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 4.3 billion shares, compared with 5.03 billion traded Thursday.

The Russell 2000 index of smaller companies fell 15.56, or 2.16 percent, to 704.65.

The Dow Jones industrial average ended the week down 193.88, or 1.51 percent, at 12,606.30. The Standard & Poor's 500 index finished down 10.60, or 0.75 percent, at 1,401.02. The Nasdaq composite index ended down 64.71, or 2.58 percent, at 2,439.94.

The Russell 2000 index finished the week down 16.95, or 2.35 percent, at 704.65.

The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 US-based companies -- ended Friday at 14,042.54, down 168.30 points, or 1.18 percent, for the week. A year ago, the index was at 14,350.24.

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