DECEMBER 23, 2010.

Dow Edges Up to New High Since 2008

By DONNA KARDOS YESALAVICH

NEW YORK—The Dow Jones Industrial Average edged up to a fresh two-year closing high Thursday while other measures slipped following a mixed bag of economic data that left investors with little reason to make major position changes ahead of the holiday.

The Dow rose 14 points, or 0.12%, to 11573.49, its highest closing level since August 2008.

Stocks ended flat for the day in light pre-holiday trading but Joe Bel Bruno explains why it's a Merry Christmas for investors, with the Dow up 5% for the month and the S&P 500 and Nasdaq each up 6.5% so far in December. Plus, oil prices spike again.
.Alcoa led its climb with a rise of 20 cents, or 1.3%, to $15.34. Chevron was also strong, up 76 cents, or 0.9%, to 90.68, and Exxon Mobil added 40 cents, or 0.6%, to 73.20, boosted by a climb in crude-oil futures to fresh two-year highs above $91 a barrel.

Limiting the Dow's ascent, Bank of America fell 32 cents, or 2.4%, to 13.06. Walt Disney was also weak, off 25 cents, or 0.7%, to 37.70, while Travelers slipped 37 cents, or 0.7%, to 55.48.

The Nasdaq Composite fell 5.88, or 0.22%, to 2665.60, but gained 0.9% for the week The Standard & Poor's 500-stock index shed 2.07, or 0.16%, to 1256.77, with financials leading to the downside in a small pullback from the sector's Wednesday rally while energy and materials stocks rose. The broad measure gained 1% on the week.

Still, it was a positive week for stocks, with the Dow up 0.71% on the week, the S&P 500 up 1% and the Nasdaq up 0.9%, adding to their gains for the month. With one week left to December, the Dow is up 5.2% for the month, while the S&P 500 is up 6.5% and the Nasdaq is up 6.7%.

U.S. stock markets are closed on Friday, Christmas Eve.

The activity followed a mixed round of economic data with few surprises, prompting investors to see little need to change their positions heading into the holiday.

While durable-goods orders fell more than twice the drop that was projected by economists, they were weighed down by a 53.1% plunge in commercial airplane orders. New orders for nondefense capital goods excluding aircraft—a metric that is considered a key barometer of capital spending—rose 2.6%, an indication businesses are spending as the economy recovers.

Also encouraging, the Reuters/University of Michigan consumer sentiment index's final reading for December edged higher, meeting expectations.

Meanwhile, U.S. consumer spending was modest in November with a 0.4% increase, slightly smaller than the 0.5% rise economists had forecast. Demand for new homes in the U.S. also rose less than expected with an increase of 5.5%.

"Housing is a little bit worrisome, but it's not totally out of expectations," said Weyman Gong, chief investment officer at Signature. "We never expected the housing market to recover any time soon in a big move."

Despite some of the data missing expectations, taken together it was seen as confirming the recent trend of a slow-but-steady economic recovery, said Brian Gendreau, market strategist at Financial Network, a financial advisory firm.

"I don't think we can count on housing to lead us out of this recovery, but we are seeing strong export growth, and pretty strong consumer spending," Mr. Gendreau said. "Those are all good signs."

Thursday's stock moves came on thin volume as traders began departing for the holiday weekend. The stock market will be closed on Friday. Less than 3 billion shares changed hands in New York Stock Exchange Composite volume during the session, well below the month's average of 4.8 billion shares a day.

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.Among stocks in focus, Bed Bath & Beyond climbed 2.43, or 5.1%, to 50.10. The housewares retailer posted a 25% increase in fiscal third-quarter earnings, beating its guidance and raising its expectations for the remainder of the year.

Jo-Ann Stores surged 14.56, or 32%, to 60.19, after the fabric and craft retailer agreed to be acquired by private-equity firm Leonard Green & Partners LP for about $1.6 billion. Jo-Ann holders would get $61 a share under the buyout bid, a 34% premium to Wednesday's closing price.

Sonic Solutions jumped 3.22, or 29%, to 14.42, after the digital-media company signed a definitive agreement to be acquired by Rovi Corp. in a stock-and-cash transaction that has an enterprise value of around $720 million. The pact values Sonic's common stock at $14.17 a share, a 38.2% premium to Sonic's 30-day average per share closing price as of Dec. 21. Rovi shares slipped 1.09, or 1.9%, to 57.26.

Micron Technology shed 34 cents, or 4.1%, to 7.94. The memory-chip maker's fiscal first-quarter profit declined 24% on lower margins as softening personal-computer demand weighed and sales growth missed Wall Street's expectations.

Verigy climbed 40 cents, or 3.2%, to 13.03, after Advantest Corp. boosted its takeover bid for the semiconductor-testing company by 23% to roughly $900 million. Verigy's board is taking no stance yet on the bid and continues to back a nearly $600 million deal to acquire LTX-Credence. LTX-Credence declined 4 cents, or 0.6%, to 7.72.

U.S. shares of Allied Irish Banks tumbled 13 cents, or 12%, to 96 cents. Ireland's Minister for Finance Brian Lenihan announced plans to recapitalize the Irish bank.

Crocs slid 99 cents, or 5.3%, to 17.70, after the company said its chief financial officer, Russell C. Hammer, has resigned effective Dec. 31 to join an unnamed Chicago-based public company as its financial chief. The shoe maker said a search for Mr. Hammer's successor is under way.

Write to Donna Kardos Yesalavich at donna.yesalavich@dowjones.com

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