NEW YORK (CNN/Money) -
The U.S. stock market ended the session Thursday and finished a shortened week just below unchanged, as a slew of positive earnings news competed with continued concerns about geopolitical issues and whether stock valuations have become too lofty.
The Dow Jones industrial average (down 38.12 to 10442.03, Charts), which welcomed three new stocks and bid adieu to three others, sported declines of about 0.35 percent.
The Standard & Poor's 500 (down 1.21 to 1139.32, Charts) index lost 0.1 percent and the Nasdaq composite (up 2.64 to 2052.88, Charts) added 0.1 percent. All three indexes had sported strong gains in the morning and struggled in the afternoon.
For the week, the Dow lost 0.3 percent, the S&P 500 lost 0.2 percent and the Nasdaq lost 0.2 percent.
Stock markets rallied Monday on earnings optimism. But that was challenged Tuesday and Wednesday amid concerns that the reporting period might not be as bullish as had been hoped, due in part to disappointing results from Alcoa and profit warnings from Nokia and Seagate Technologies.
Those concerns were somewhat mollified early Thursday, following Yahoo!'s upbeat earnings report and an improved forecast from Dell. However, a morning rally Thursday fizzled, both in anticipation of the three-day Easter weekend and because of renewed geopolitical concerns. It never picked up again.
U.S. stock and bond markets will be closed Friday in observance of Good Friday.
Geopolitical worries moved to the forefront Thursday as fighting continued in Iraq and National Security Advisor Condoleezza Rice testified before the September 11 Commission. (For more on these news events, go to CNN.com.)
"It's a quiet day before Easter, and we're waiting for the bunny," said Tim Heekin, head of stock trading. "You have people not wanting to make moves before a three day weekend, and you have some fears about terrorism -- with Rice speaking, and because this is a religious holiday."
The see-saw trade this week also reflected the broader conflict in the stock markets.
Analysts surveyed by tracking firm First Call expect that S&P 500 earnings in the first-quarter probably rose about 17 percent versus a year earlier, and the actual results could prove to be a lot higher, with corporate management being careful not to overpromise results. But after the huge run the market has had, strong earnings may not yield a new phase of the rally.
"Right now, it's going to be a push and pull," Heekin added. "Earnings are expected to be good. The question is, will people sell on the earnings news or buy? I think they're going to sell first before they buy. We're in this range. I don't think you're going to have any big moves in this market until later in the summer when it gets closer to the time of a rise in interest rates.”
Next week brings a number of earnings reports, with the largest concentration in the technology, financial, airline, consumer and healthcare sectors. (For a look at the week’s most potentially market-moving results, click here.)
What moved?
After the bell Wednesday, Yahoo! (YHOO: up $7.86 to $56.21, Research, Estimates) reported a profit of 13 cents per share, up from 8 cents a year earlier and two cents more than what analysts were expecting. The company also announced a 2-for-1 stock split. The stock surged 16.3 percent in active Nasdaq trade.
Other Internet search firms spiked in response, including LookSmart (LOOK: up $0.26 to $2.21, Research, Estimates) and Ask Jeeves (ASKJ: up $1.97 to $40.05, Research, Estimates). Online advertising firms such as DoubleClick (DCLK: up $0.92 to $12.63, Research, Estimates) gained as well.
But the technology sector overall was more mixed. The Nasdaq’s two most actives were Sirius Satellite Radio (SIRI: down $0.18 to $3.84, Research, Estimates), down 4.5 percent and Intel (INTC: down $0.25 to $27.37, Research, Estimates), down 0.9 percent.
Dell (DELL: up $0.81 to $35.63, Research, Estimates) raised its first-quarter revenue forecast late Wednesday, although it kept its earnings per share outlook unchanged. Shares in the PC powerhouse gained 2.3 percent.
In other corporate news, the previously announced reshuffling of the Dow 30 went into effect at the start of trading Thursday. Verizon Communications (VZ: unchanged at $37.31, Research, Estimates), Pfizer (PFE: down $0.07 to $35.60, Research, Estimates) and American International Group (AIG: up $0.02 to $76.27, Research, Estimates) were added, replacing International Paper (IP: down $0.39 to $42.01, Research, Estimates), AT&T (T: down $0.29 to $19.23, Research, Estimates) and Eastman Kodak (EK: down $0.05 to $25.44, Research, Estimates).
The three new Dow members closed little changed. Losses in General Electric contributed to the index's weakness, too. Before the start of trading Thursday, General Electric (GE: up $0.01 to $31.41, Research, Estimates) reported earnings of 32 cents per share, unchanged from a year earlier and in line with analysts' estimates, enough to send the stock south.
Another Dow component, Wal-Mart (WMT: down $1.29 to $56.69, Research, Estimates), shed 2.2 percent after it issued an April sales guidance that was at the low end of current estimates. Wal-Mart and Alcoa (AA: down $0.79 to $33.86, Research, Estimates) were the Dow’s biggest decliners.
Market breadth was negative. On the New York Stock Exchange, declining stocks outnumbered advancers by more than five to three as 1.18 billion shares changed hands. On the Nasdaq, where 1.66 billion shares traded, losers edged gainers by a small amount.
Treasury prices fell. The benchmark 10-year note lost 1/4 of a point, pushing its yield up to 4.18 percent from 4.15 percent. The dollar edged higher versus the yen and euro.
Among commodities markets, NYMEX light sweet crude oil futures rose 99 cents to settle at $37.14 a barrel. COMEX gold fell $3.00 to settle at $420.70 per ounce.
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