Santa rally slipping away

Stocks decline in light trading ahead of holiday weekend; durable goods orders fall unexpectedly; bond prices tumble.

NEW YORK ( -- Stocks fell in light trading Friday amid concerns about the health of the economy.

The Dow Jones industrial average (down 50.95 to 12,370.30, Charts) lost about 0.4 percent an hour into the session. The broader S&P 500 index (down 3.43 to 1,414.87, Charts) and the tech-heavy Nasdaq composite (down 2.34 to 2,413.51, Charts) posted modest losses.

The so-called Santa Claus rally that has boosted stocks this month has been slipping amid concerns about the slowing economy.

Adding to those worries on Friday was a report showing durable goods orders tumbled unexpectedly in November.

The Commerce Department said orders for big-ticket items, excluding transportation, fell 1.1 percent.

Stocks also had trouble finding momentum ahead of the holiday weekend. U.S. stock markets will close Monday for Christmas.

Also on the economic front, the University of Michigan revised its December index of consumer sentiment lower. The reading is considered a gauge of consumer spending, which fuels two-thirds of the nation's economic activity. However, the index did remain near the year's highs and the drop was less than analysts had projected.

The Commerce Department's report on personal income and spending offered a tame reading on inflation. The report's key inflation gauge, called the core PCE, was flat in November. (Full story)

On the move

Volatility was high ahead of the holidays. The Chicago Board Options Exchange Volatility index (up $0.47 to $11.00, Charts) climbed 5 percent.

Among stock movers, software company Red Hat (up $3.05 to $21.01, Charts) surged 17 percent. The company reported upbeat earnings for its latest quarter late Thursday and issued a robust forecast for the current period.

Research In Motion (up $2.41 to $136.11, Charts) rose nearly 2 percent. The BlackBerry maker also reported quarterly results late Thursday and impressed investors with its earnings and outlook.

Qualcomm (down $0.44 to $38.10, Charts), a provider of microchips for mobile telephones, fell 1 percent. The company lowered its quarterly profit outlook Thursday.

Market breadth was negative. On the New York Stock Exchange, decliners topped advancers by a margin of 5 to 4 on volume of 222 million shares. On the Nasdaq, losers beat winners by a margin of 7 to 6 as 353 million shares changed hands.

U.S. light crude oil for February delivery fell 6 cents to $62.60 a barrel on the New York Mercantile Exchange, extending Thursday's more than $1 decline.

Treasury prices fell, raising the yield on the benchmark 10-year note to 4.58 percent from 4.54 percent late Thursday. Bond prices and yields move in opposite directions.

The dollar was lower against the euro and little changed against the yen.

Stocks in Asia closed mostly higher, while major indexes in Europe were lower in afternoon trading.

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