Mild day, strong year

NEW YORK (CNNMoney.com) -- Stocks clung to a tight range near midday Friday, with investors content to hold on to recent gains at the end of a strong year on Wall Street.

The Dow Jones industrial average (up 4.89 to 12,506.41, Charts) was little changed more than two hours into the session after having posted slim gains through the morning. The blue-chip barometer hit a record trading high on Thursday and a record closing high on Wednesday.

The broader S&P 500 (down 0.40 to 1,424.33, Charts) index was little changed and the Nasdaq (up 4.62 to 2,430.19, Charts) composite gained a few points.

Stocks dipped Thursday in response to Apple's options woes, volatile oil prices, upbeat economic news and a spike in Treasury bond yields.

With little corporate or economic news Friday, investors seemed content to hold on to the recent momentum.

All financial markets were closed Monday for Christmas and will be closed Monday for New Year's Day. Markets will also be closed Tuesday for a national day of mourning in honor of President Gerald Ford, who passed away Tuesday night.

2006 is set to become the fourth year in a row that the S&P 500 and Nasdaq composite have posted gains. For the Dow, it will be the third of four years, after the blue-chip average saw a slight decline in 2005.

Since bottoming in July, stocks have been on a tear, leaving the Dow up 16.7 percent this year as of Thursday's close, while the S&P 500 is up just a little more than 14 percent.

The Nasdaq composite has gained 10 percent, and the Russell 2000 (down 0.27 to 794.21, Charts) small-cap index has jumped 18 percent in 2006.

"The market is supposed to do well in the fourth quarter and that's exactly what it did," said Chris Johnson, chief executive officer at Johnson Research Group.

Johnson said the seasonal tendency for a strong fourth quarter - typically the best of the year for stocks - was exacerbated in 2006 by the involvement of investors who had sat out the rally in August and September.

"The bottom in July caught some investors by surprise and they stayed on the sidelines initially," he said. "So in the fourth quarter, we saw investors chasing the market higher because they had missed out in the summer and early fall."

In the latest development in the Apple stock options case, the company restated its earnings and acknowledged that stock options were wrongly dated. However, it also said that CEO Steve Jobs didn't benefit as a result. Apple (up $4.19 to $85.06, Charts) stock rallied. (Full story).

In other news, Marsh & McLennan (down $0.01 to $30.71, Charts) will sell its Putnam Investments unit to fellow financial firm Power Corp. of Canada for $3.9 billion, the Wall Street Journal reported.

AT&T (up $0.46 to $35.96, Charts) rose on news that it has offered two concessions that should lead the way to winning approval of its $85 billion buyout of BellSouth (up $0.66 to $47.46, Charts).

Treasury prices slipped, raising the yield on the benchmark 10-year note to 4.71 percent from 4.68 percent late Thursday. Bond prices and yields move in opposite directions.

U.S. light crude oil for February delivery fell 8 cents to $60.45 a barrel on the New York Mercantile Exchange.

COMEX gold rose 20 cents to $637.10 an ounce.

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