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From Briefing.com: 4:55 pm Weekly Wrap

U.S. stocks finished lower during the past week, as further evidence of worsening conditions in the housing market and sluggish business investment trends prompted some broad-based selling late in the holiday-shortened period.

In a shortened session on Monday, stocks were lifted by news that investment bank Merrill Lynch (MER) plans to sell a lending unit to GE Capital and has raised $6.2 billion in new capital from Temasek Holdings – a state-owned Singapore investment firm - and Davis Selected Advisors. The news helped ease investors' concerns about liquidity issues and lent some support for the beaten-down financial sector.

Upon returning from the Christmas break on Wednesday, stocks were little changed as weakness in the retail sector and concerns about holiday spending weighed on investor sentiment.

Target Corp. (TGT) led retail stocks lower during the session, after the discounter lowered its sales outlook due to unfavorable traffic trends and prevailing consumer headwinds.

On Thursday, the major averages dropped sharply, with the Dow Jones Industrials falling nearly 190 points, after the Commerce Dept. reported a lower than expected rise in November durable goods new orders, and an analyst at Goldman Sachs Group (GS) said Citigroup may have to cut its quarterly dividend by 40% to conserve cash and take up to an additional 70% in write-downs given its exposure to bad debt.

Durable goods new orders rose a disappointing 0.1% in November. That was below analysts' expectations for a 2.2% gain, and follows a revised 0.4% decline in October as business investment trends remain sluggish.

However, in other economic news, the Labor Dept. showed initial claims for the week ended Dec. 22 were essentially stable at 349,000, while consumer confidence improved to 88.6 in December from a revised 87.8 in the previous month.

The assassination of Pakistan's former prime minister and opposition leader Benazir Bhutto also weighed on the market Thursday, raising the possibility of further political turmoil and instability in the volatile region.

Stocks opened higher on Friday, but trended lower after a government report confirmed the ongoing problems in the housing sector, which continues to weigh on overall economic activity.

According to a report from the Commerce Dept., new home sales slipped 9% in November from October to a 647,000 annual rate, with builders still grappling with a glut of inventory and slowing demand.

In a bright spot, however, the Chicago PMI survey of regional manufacturing conditions improved to 56.6 for December, up from 52.9 in November and better than an expected reading of 52.0. Although the report is encouraging, the national ISM survey will provide a better read on overall conditions when it is released on January 2.

In corporate news, Warren Buffet's Berkshire Hathaway (BRK.A), which acquired privately-held industrial conglomerate Marmon Holdings for $4.5 billion earlier this week, agreed to buy the reinsurance business unit from Dutch financial services company ING Groep NV (ING) for approximately $440 million. The Omaha, NE-based company also said it has opened a bond insurance business to help reduce borrowing costs for local and state governments amid recent turmoil in the credit markets. Berkshire's entrance into the battered market will challenge other bond insurers like MBIA (MBI) and Ambac Financial (ABK).

--Richard Jahnke, Briefing.com

 
 Index      Started Week Ended Week Change % Change  YTD  
 DJIA         13450.65    13365.87  -84.78   -0.6 %  7.2 %  
 Nasdaq        2691.99     2674.46  -17.53   -0.7 % 10.7 %  
 S&P 500       1484.46     1478.49   -5.97   -0.4 %  4.2 %  
 Russell 2000   785.60      771.76  -13.84   -1.8 % -2.0 %

4:25 pm : The stock market got out of the gate on a bullish note, underpinned by a belief that Thursday's sell-off in the wake of Benazir Bhutto's assassination was an overreaction. The rebound effort was short-lived, though, as it fell by the wayside in the wake of a much weaker than expected New Home Sales report for November.

With respect to the data, the Dept. of Commerce indicated new home sales declined 9.0% in November to an annualized rate of 647,000 units. That level marked a 12-year low and was well below the consensus estimate which had been pegged at 715,000. Treasuries rallied on the report with the 10-year note jumping a point and bringing its yield down to 4.07%.

The news weighed heavily on the homebuilding stocks, though, which comprised today's worst-performing industry group (-3.2%). The thrifts & mortgage group (-3.0%) followed close behind in an association trade that was tied to a belief that demand for mortgages will remain depressed along with the housing market.

The financial sector (-0.5%), in general, was a laggard and acted as a key restraint on the broader market which finished the day relatively flat.

Bond insurance companies Ambac Financial (ABK 25.12, -4.02) and MBIA (MBI 18.74, -3.53) were among the weakest performers as news that Berkshire Hathaway (BRK.A 141,100, +3300) has started a new bond insurance business for state and municipal bond issuers raised competitive concerns for investors.

The other laggard today was the consumer discretionary sector (-0.2%), which has been the financial sector's counterpart throughout the year. Once again, concerns about a slowdown in spending due to the weakness in the housing market contributed to the underperformance.

Strikingly, the remaining eight sectors ended the day higher, yet the modest nature of their gains, excluding energy (+1.0%), didn't help the broader market forge ahead to any great extent.

Volume, it should be noted, was on the light side with only 1.0 billion shares traded at the NYSE. That is a reflection of the holiday conditions and suggests there wasn't a lot of conviction behind Friday's action.

For the shortened week, the Dow, Nasdaq and S&P 500 slipped 0.6%, 0.7% and 0.4%, respectively. DJ30 +6.26 NASDAQ -2.33 SP500 +2.12 NASDAQ Dec/Adv/Vol 1676/1347/1.33 bln NYSE Dec/Adv/Vol 1572/1611/1.01 bln

9:13AM Clearwire annouced that Arvind Sodhani tendered his resignation from the Board (CLWR) 14.86 : After the close last night, Clearwire (CLWR) announced that Arvind Sodhani tendered his resignation from the CLWR board. Intel (INTC) intends to appoint a new representative to CLWR's board of directors as soon as practicable, replacing Arvind Sodhani, who joined the CLWR board in 2006. Sodhani serves as president of Intel Capital and executive vice president of INTC, and has been one of two members of the CLWR board that are appointed by Intel. Because of the scope of Sodhani's responsibilities as president of Intel Capital and executive vice president of INTC, Sodhani believed that it was prudent that he resign from the CLWR board to avoid any conflicts of interest that might arise.