Stocks fizzle ahead of holiday

Wall Street gives back earlier gains to end a quiet session lower. Bonds and dollar fall.

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By Ben Rooney, staff writer

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NEW YORK( -- Stocks slumped at the close of Friday's session, ending the week little changed, as investors went into a holiday weekend with lingering concerns about the economy.

The Dow Jones industrial average (INDU) lost 15 points, or 0.18%, to close at 8277.3. It was the Dow's fourth straight loss, but it still managed to end the week with a slight gain.

The S&P 500 (SPX) index slipped 0.15% to 887 but was up 0.5% for the week. The Nasdaq composite (COMP) slid about 0.2%.

Stocks seesawed in early trading before heading higher in the afternoon as concerns about the U.S. credit rating abated. But the market soldoff near the closing bell.

Analysts said the market lacked conviction Friday because many investors were absent ahead of the Memorial Day holiday. U.S. markets will be closed Monday for the observance.

Meanwhile, the dollar fell to its lowest level in five months against a basket of currencies. Bonds slumped, with the yield on the 10-year note climbing to a 6-month high.

Energy stocks showed early strength as oil prices remained solidly above $60 a barrel.

Shares of financial services companies were under pressure after BankUnited FSB went under Thursday, becoming the largest bank failure of the year.

Looking ahead, the sense of economic optimism that lifted the market some 30% over the past few months will be put to the test next week by a number of key indicators.

"The market has been the beneficiary of less bad news in terms of macro economic data and better-than-expected corporate earnings," said Quincy Krosby, chief investment strategist at the Hartford. "In the next phase, investors will have to see a continuation of less bad news evolving into positive data."

A key home price index, durable goods orders and a revision of first-quarter gross domestic product are all on tap for next week.

Additionally, the fate of troubled automaker General Motors will be in focus. GM bondholders face a Tuesday deadline to make concessions under the troubled automaker's restructuring plans. The company could face bankruptcy if it fails to make the turnaround required by the government by the end of the month.

Companies: Sears Holdings (SHLD, Fortune 500) parent company of retailers Sears and Kmart, reported earnings Thursday that beat analysts' expectations and amended its credit facility to provide additional funding. Shares rose 11% Friday.

Gap (GAP, Fortune 500) said Friday it earned 31 cents per share in the first quarter, down from 34 cents a year earlier, but slightly better than the 30-cent profit analysts had expected. Shares rose nearly 3%.

Another apparel retailer, Aeropostale (ARO), reported better-than-expected first-quarter results and issued an upbeat profit forecast. The stock gained about 4%.

Autos: The U.S. government said Thursday it invested $7.5 billion in GMAC, the main source of financing for General Motors (GM, Fortune 500) customers, and the main lender for Chrysler.

Bonds: Treasury prices fell, raising the yield on the benchmark 10-year note to 3.46% from 3.36% Thursday. Treasury prices and yields move in opposite directions. The 10-year yield has not been this high since late December.

The bond market closed at 2 p.m. ET Friday.

Other markets: Stocks in Asia finished the session in negative territory, dragged lower by economic worries. Major markets in Europe closed higher.

In currency trading, the dollar continued to fall against major international currencies. The euro rose 0.95% against the buck to $1.4022.

Oil for July delivery rose 62 cents to settle at $61.67 a barrel.

COMEX gold for June delivery rose $7.70 to settle at $958.90 an ounce. To top of page

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