NEW YORK – Stocks fell Friday despite declining oil prices and news of a joint bid for Adelphia, as investors locked in profits and a three-percent drop in General Motors helped snap a four-day rally by the Dow.
The Dow Jones industrial average (search) was down 84.98 points, or 0.81 percent, to end at 10,461.34. The Standard & Poor's 500 Index (search) was down 9.94 points, or 0.83 percent, to close at 1,181.20. The Nasdaq Composite Index (search) was down 19.44 points, or 0.96 percent, to finish at 1,999.35.
Despite Friday's sell-off, stocks ended the week higher. The Dow rose 0.55 percent for the week, while the S&P 500 advanced 0.71 percent and the Nasdaq gained 0.73 percent.
"We've had some negative pre-announcements that are having an impact," said Todd Clark, a senior trader at Wells Fargo. "I also think you have people unwinding their positions ahead of the weekend. They're saying, 'It's been a strong week, thank you very much, I'll take my profits and see what happens next week."'
Shares of trucking company USF Corp.(USFC), which has agreed to be taken over by Yellow Roadway Corp., fell 4.3 percent to $46.40 after USF said it sees a drop in first-quarter profit. Yellow fell 5.6 percent to $55.86. The Dow Jones transportation index fell to a six-week low.
Oil prices continued to decline, with U.S. light crude for May delivery settling at $53.32 a barrel, down 79 cents in a volatile session on the New York Mercantile Exchange (search) — pulling further away from the $58.28 record hit earlier this week.
High oil prices tend to impact corporate profits and consumer spending so a fall generally helps stocks in general.
But Friday, the positive impact was partly outweighed by slides in oil producers Exxon Mobil Corp. (XOM) and ChevronTexaco Corp. (CVX). Exxon was down 1.4 percent, or 84 cents, at $60.01, while ChevronTexaco dropped 2.1 percent, or $1.23, to $56.69.
"The sell-off in oil is causing energy stocks to be particularly weak and that's adding some pressure," said Larry Peruzzi, senior equity trader at The Boston Co. Asset Management, a Mellon subsidiary. "We're also seeing continued selling in retail stocks after yesterday's same-store-sales came in very light."
General Motors (GM) fell $1.03 to $29.50 — making it the Dow's biggest percentage loser. Deutsche Bank downgraded the stock to "sell" from "hold."
Meanwhile, GM pulled its advertising from the Los Angeles Times over what it called factual errors and misrepresentations in the newspaper after a series of critical articles, a spokesman for the automaker said late Thursday.
After the closing bell, Ford Motor Co. (F) cut its 2005 earnings forecast. That sent Ford's stock down 3 percent, or 33 cents, to $10.70 on the Inet electronic brokerage network, while its rival GM declined 0.4 percent to $29.37 after hours. Ford ended regular trading at $11.03, down 2 percent, or 27 cents, on the New York Stock Exchange.
Shares of Cardinal Health Inc. (CAH) also put a damper on the S&P 500, falling 2.2 percent to $55.60 after the company said it received a subpoena from New York Attorney General Eliot Spitzer as part of a broad industry probe into a segment of drug wholesaling.
American International Group Inc. (AIG) dragged on the Dow, falling 1.7 percent, or 88 cents, to $51.91, as pressure builds from multiple investigations facing the huge insurance company. Authorities are set to interview AIG's former chief executive and chairman Hank Greenberg next week.
Technology shares were led lower by software stocks. Borland Software Corp. (BORL) plummeted 18 percent, or $1.33, to $6.16 on Nasdaq, a day after the company cut its first-quarter outlook. J.P. Morgan Friday lowered its investment rating on Borland to "neutral" from "overweight."
Steel companies slipped after UBS cut its second-quarter steel price forecast and said a weaker outlook could "deteriorate sentiment" on companies, including Nucor and US Steel. Nucor Corp. (NUE) fell 3.5 percent, or $2.03, to $55.27, while US Steel Corp. (X) dropped 4 percent, or $2.13, to $48.22.
Wall Street welcomed media reports that Time Warner Inc. (TWX) and Comcast Corp. (CMCSA) have teamed up in an $18 billion bid for Adelphia, in which a combined Time Warner/Adelphia cable company would be spun off into a public company.
According to newspaper reports, Time Warner and Comcast are offering $12 billion to $13.5 billion in cash for Adelphia, along with stock valued between $4.5 billion and $5.6 billion. Comcast would swap its 21 percent stake in Time Warner for 2 million Adelphia subscribers. Time Warner could then combine the rest of Adelphia with its cable unit for a public offering. Time Warner was up 9 cents at $17.97 on the news, while Comcast lost 21 cents to $33.07.
In other merger news, ShopKo Stores Inc. (SKO) climbed $2.99, or 13 percent, to $26.02 after private equity firm Goldner Hawn Johnson & Morrison announced its $1 billion takeover of the regional retailer, which offers general merchandise in its Midwest stores.
The Wall Street Journal reported that former Wal-Mart Stores Inc. (WMT) Vice-Chairman Thomas Coughlin falsified expense reports, leading to his March 25 resignation from the company's board. The Justice Department is investigating, the newspaper reported. Wal-Mart slipped 33 cents to $48.57.
LaBranche & Co. Inc. (LAB), whose specialists manage stock trades on the floor of the New York Stock Exchange, said its earnings for the quarter would come in below Wall Street forecasts. LaBranche tumbled $1.01, or 10.2 percent, to $8.85.
ConAgra Foods Inc. (CAG) said it delayed filing a quarterly report with the U.S. Securities and Exchange Commission because it is in the process of restating prior financial statements after discovering tax-related errors.
Consulting firm Accenture Ltd. (ACN) lost $1.44 to $23.45 after reporting strong revenues and profits for the quarter. The company's outlook for the current quarter and full year were in line with Wall Street estimates, though one-time benefits fueled some of Accenture's forecasts.
Trading was moderate, with 1.32 billion shares changing hands on the New York Stock Exchange, below the 1.46 billion daily average for last year. About 1.52 billion shares were traded on Nasdaq, below the 1.81 billion daily average last year.
Decliners outnumbered advancers on the New York Stock Exchange by about 12 to 5 and by about 2 to 1 on Nasdaq.
The Russell 2000 index of smaller companies was down 9.01, or 1.45 percent, at 610.75.
Overseas, Japan's Nikkei stock average rose 0.54 percent. In Europe, Britain's FTSE 100 closed up 0.13 percent, France's CAC-40 was flat for the session, and Germany's DAX index gained 0.25 percent.
Reuters and the Associated Press contributed to this report.