Dow Marks Its Eighth Straight Week of Gains

Major stock indexes slipped Friday, but the Dow industrials still managed to notch their eighth straight week of gains -- and their biggest two-month advance in more than 15 years.

Analysts said Friday’s drop amid light trading wasn’t particularly surprising after blue-chip stocks surged 255 points Wednesday on better-than-expected economic data.

Wall Street was closed Thursday for Thanksgiving, and markets were open for only half a day Friday.

“The market is really hanging in there pretty well,” said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee.

The Dow Jones industrial average fell 35.59 points, or 0.4%, to 8,896.09. The Nasdaq composite index dropped 9.16 points, or 0.6%, to 1,478.78. The Standard & Poor’s 500 index fell 2.56 points, or 0.3%, to 936.31.

Winners and losers were about even on the New York Stock Exchange and Nasdaq. Volume was scant on what is traditionally one of the lightest trading days of the year.

For the week, the Dow gained 1% to stretch its winning streak to eight weeks, a feat not seen since the period ended March 20, 1998. The Nasdaq climbed 0.7% and the S&P; 500 rose 0.6%, their seventh week of advances in the last eight weeks.

The Dow’s two-month gain of 17.2% was the largest since January and February of 1987, when blue chips climbed 17.3%.

Analysts said optimism is growing about the strength of the economic recovery, and investors are hastening to jump aboard the current rally. Since hitting a five-year low Oct. 9, the Dow has gained about 1,600 points, or 22%.

Analysts caution that stocks remain vulnerable to declines on profit taking. In addition, many investors were watching to see how retailers fared Friday, the traditional opening of the holiday shopping season.

“The market is getting a little bit ahead of itself, and people are getting a little bit leery of buying stocks,” said Dan McMahon, head of listed trading at CIBC World Markets. “You will see more people taking profits at these levels in the short term. The economy seems like it has bottomed and the soft patch is behind us, but there doesn’t seem to be any real expansion.”

Moreover, worries remain about the threat of war with Iraq and the possibility of more attacks on the United States. Thursday brought a deadly suicide bombing at an Israeli-owned hotel and an attempt to shoot down an airliner full of Israeli tourists, both in Kenya.

The market also was rattled Friday by news that United Airlines’ machinists union rejected wage concessions that were part of the company’s effort to stay out of Bankruptcy Court. Shares of United parent UAL slid $1.18, or 32.5%, to $2.45.

Treasury yields dipped after surging Wednesday. The yield on the benchmark 10-year Treasury note closed at 4.21%, down from 4.25% on Wednesday.

In other highlights:

* Retail stocks were mixed as investors awaited the results of the first big holiday shopping weekend. Home Depot added 31 cents to $26.40 and Sears, Roebuck gained 88 cents to $27.70. But Wal-Mart Stores fell 94 cents to $53.90 and Target slipped 52 cents to $34.78. The Amex index of 20 retail stocks rose 3.5%.

* Toy retailer FAO tumbled 45 cents, or 16%, to $2.30 after the company warned that it would not meet its earnings target this year because of weak sales. FAO operates upscale children’s toy stores FAO Schwarz and the Zany Brainy and Right Start chains.

* EP MedSystems surged $2.52, or 105%, to $4.92 after the company said the Food and Drug Administration gave it approval to market its Alert catheter system in the United States.

* Sealed Air soared $13.72, or 56%, to $38.20 after the company said it agreed to resolve all pending and future asbestos-related claims against it for less than some investors had feared.

The agreement boosted hopes that other companies were close to resolving their asbestos woes. Honeywell International rose $1.57 to $26.01 and Halliburton rallied $2.18 to $21.37. Georgia Pacific jumped $3.05 to $20.62.

Market Roundup, C4-5