Originally created 08/20/05

Gains slow as Merck gets ruling

NEW YORK - Stocks ended an uneasy week mostly higher Friday as a jury verdict against Merck & Co. over its painkiller Vioxx erased much of an earlier advance fueled by bargain hunting. The major indexes all suffered losses for the week.

Wall Street quickly pulled back late Friday after a Texas court found Merck liable for the death of a man who took Vioxx and awarded his estate more than $250 million in damages. Merck shares dropped $2.35, or 7.7 percent, to $28.06 at the close of trading.

The overall market still managed a small gain as bargain hunters took advantage of recent declines and bought up underperforming stocks. Positive analyst reports on Coca-Cola Inc. and International Business Machines Corp., and indications of continued growth in China from Caterpillar Inc., also encouraged investors.

The advance also held despite a jump in crude oil futures, which rose on news of demonstrations in Ecuador that have disrupted oil exports. A barrel of light crude surged $2.08 to settle at $65.35 on the New York Mercantile Exchange.

The Dow Jones industrial average rose 4.30, or 0.04 percent, to close Friday at 10,559.23.

Broader stock indicators finished mixed. The Standard & Poor's 500 index gained 0.69, or 0.1 percent, to 1,219.71, while the Nasdaq composite index slipped 0.52, or 0.02 percent, to 2,135.56.

Bonds were even despite the rise in stocks, with the yield on the 10-year Treasury note unchanged at 4.21 percent. The dollar was mixed against other major currencies, while gold prices inched lower.

Trading was expected to be volatile during Friday's session on Wall Street because of the expiration of monthly futures contracts, which customarily prompts investors to make shifts in their holdings.

Although stocks gave up some of their gains after the Merck verdict, the market's reaction was nonetheless muted, as investors had previously factored in major Vioxx liability into the drug-maker's stock. Pfizer Inc., whose painkillers Bextra and Celebrex are similar to Vioxx, fell 33 cents to $25.55, while Eli Lilly & Co. closed down 5 cents at $52.57.

Stocks were pressured for much of the week by evidence of inflation brought on by higher energy costs, especially after the government's inflation reports showed big jumps in wholesale and consumer prices during July. The Dow fell 0.39 percent for the week, while the S&P 500 lost 0.87 percent and the Nasdaq dropped 0.99 percent.

Wall Street has languished this month after rallying in July on strong corporate earnings and growth in the economy. Uncertainty about where the market is headed has had investors trading lightly as they grapple with the effects of soaring oil prices amid improved economic data and persistently low interest rates.

But analysts found some positive signs.

"I guess all things considered, the market's been pretty impressive in the face of oil prices," said Barry Berman, a head trader at Robert W. Baird & Co. "It would appear that way looking at the fact that interest rates are still low on a relative basis. Lower rates are going to keep the economy going."

The markets

Friday's close:

Dow Jones Industrial 10,559.23 4.3, or 0.04%

Standard & Poor's 500 Index 1,219.71 0.69, or 0.1%

Nasdaq Composite Index 2,135.56 0.52, or 0.02%

- Associated Press


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