NEW YORK – U.S. stocks finished slightly lower Thursday as investors sold off recent outperformers to secure profits before the year-end. Concerns about stock options grants at Apple Computer (AAPL) Inc. dragged on the Nasdaq.
The Dow Jones industrial average slipped 9.05 points, or 0.07 percent, to end at 12,501.52. The Standard & Poor's 500 Index dipped 2.11 points, or 0.15 percent, to finish at 1,424.73. The Nasdaq Composite Index declined 5.65 points, or 0.23 percent, to close at 2,425.57.
Wednesday's leading lights, including Google Inc. (GOOG) and Citigroup Inc. (C), were among the biggest laggards on the next-to-last day of trading in 2006.
Shares of Apple Computer slid 0.8 percent, or 65 cents, to $80.87 after the Financial Times reported the company gave Chief Executive Steve Jobs 7.5 million stock options in 2001 without the required authorization of the company's board.
"People took advantage of yesterday's strength to clear out some positions," said Bruce Zaro, chief technical strategist at Delta Global Advisors in Boston. "But after the New Year, the January effect will likely take place."
In January, the U.S. stock market traditionally rises as investors put money to work following some tax-loss selling at the end of the year.
Despite the declines, the Dow managed to reach a new intraday high of 12,529.88 in the late afternoon.
If the Nasdaq ends flat or higher on Friday, all three major U.S. indexes will post double-digit percentage gains for the year.
Citigroup's stock dropped almost 1 percent, or 53 cents, to $55.88 on the New York Stock Exchange, making it the heaviest weight on the blue-chip Dow average. It was the second-biggest drag on the broad S&P 500.
Among the stocks that limited the Dow's decline were health-care products company Johnson & Johnson (JNJ), up 0.6 percent, or 41 cents, at $66.42, and drugmaker Merck & Co. (MRK), up 0.4 percent, or 18 cents, at $43.55. Earlier this week, Barron's said some health-care stocks could give investors a safe haven in 2007 when economic growth might not be as strong as in 2006.
Reports on December consumer confidence data, November existing home sales and a report from the National Association of Purchasing Management-Chicago on business activity in the Midwest were all stronger than expected, suggesting the U.S. economy was more robust than some had thought.
Google's shares dropped 1.2 percent, or $5.47, to $462.56 on the Nasdaq. It ranked second to Apple among the biggest losers in the Nasdaq 100 .
Shares of US Airways Group Inc. slumped 2.2 percent, or $1.28, to $55.76 on the NYSE after Delta Air Lines Inc. set a Feb. 7 hearing to begin seeking approval from creditors to exit bankruptcy as a stand-alone carrier, according to a court document filed on Wednesday. US Airways made an $8.3 billion takeover bid for Delta earlier this month.
Also on the economic front, the Kansas City Federal Reserve Bank reported its index on the region's manufacturing activity fell to a December reading of 4 from 6 in November.
Volume was light on the NYSE, where only about 906.6 million shares changed hands, well below last year's daily average of 1.61 billion. On the Nasdaq, about 1.27 billion shares were traded, below last year's daily average of 1.80 billion.
Decliners outnumbered advancers on the NYSE by a ratio of about 9 to 7, and on Nasdaq, by about 9 to 6.