Stocks End Session Mixed

A late rally gave Wall Street a mixed finish Friday after a lackluster employment report left investors wondering about the pace of economic growth and inflation.

Although October’s job creation figures fell short of expectations, the yield on the 10-year Treasury note closed at its highest level this year as strategists bet that tepid job numbers would not deter the Federal Reserve from raising interest rates into 2006.

The 10-year T-note yield edged up to 4.66% from 4.65% on Thursday and from 4.03% on Sept. 1.

The dollar rose to a 26-month high versus the yen and gained against the euro as currency investors also anticipated that the Fed would continue to hike interest rates. The euro fell to $1.182, and the dollar rose to 118.24 yen.

The employment report gave Wall Street little to cheer about. The Labor Department said U.S. employers added a net 56,000 jobs last month, half the 100,000 gain projected by economists.

The government also said that just 8,000 jobs were lost in September -- down from the 35,000 initially estimated -- suggesting the effects of hurricanes Katrina and Rita were less than feared.

The Dow Jones industrial average rose 8.17 points, or 0.08%, to 10,530.76.

Broader stock indicators were also higher. The Standard & Poor’s 500 index was up 0.2 of a point, or 0.02%, at 1,220.14, and the Nasdaq composite index added 9.21 points, or 0.4%, to 2,169.43.

Declining issues led advancers by 9 to 7 on the New York Stock Exchange, however, and the Russell 2,000 index of smaller companies fell 0.61, or 0.09%, to 658.16.

Even with a dearth of upbeat economic data over the last two weeks, the market continues to wander aimlessly with little concrete information to rely on, said Brian Gendreau, investment strategist for ING Investment Management.

Nonetheless, stocks finished the week with sturdy gains as the third-quarter earnings-reporting season wound down and with few major economic reports expected next week. For the week, the Dow rose 1.23%, the S&P; 500 climbed 1.81% and Nasdaq jumped 3.81%.

Cooling oil prices offered some relief Friday after expectations for greater demand this winter drove up prices more than $2 a barrel Thursday. A barrel of light crude dropped $1.20 to $60.58 on the New York Mercantile Exchange.

Although Friday’s bond and currency markets reflected anticipation of continued interest rate hikes, some traders think that the pace will slow down.

“The Fed’s rate increases next year may not be as frequent as we saw this year and look to be entering their final leg,” said Satoshi Asai, who helps oversee $1 billion of bonds at Sompo Japan Asset Management Co. in Tokyo. “So [bond] yields may not rise much from here.”

In other market highlights:

* Rate-sensitive sectors such as home builders declined on higher interest rates. KB Home dropped 68 cents to $66.40, and Ryland Group subtracted 59 cents to $69.75. Mortgage lender Countrywide Financial slipped 14 cents to $32.16.

* Apple Computer lost 70 cents to $61.15 after Prudential Equity lowered the company one notch to “neutral,” saying the stock was fairly valued after reaching a recent 52-week high on expectations for strong 2006 results.

* Investors pulled back from Merck a day after news of the drug maker’s victory in the latest trial over its Vioxx painkiller lifted shares almost 4%. The company still plans to fight the 7,000 cases that have been filed. Merck fell 26 cents to $29.22.

Pfizer, however, rose 39 cents to $22.26 after the world’s biggest drug maker won European approval to sell its Viagra male-impotence medicine to treat pulmonary arterial hypertension, a lung disorder.

* Newspaper publisher Washington Post reported a 19% drop in quarterly profit, hurt by hurricane-related costs and lower revenue in its television and magazine divisions. Washington Post slumped $10.64 to $759.36.

* Expedia surged $2.02 to $22.73 after the online travel agent said Thursday that its earnings climbed 41% to beat Wall Street targets, helped by stronger revenue and bookings.

* Technology shares advanced after a sales forecast from Sanmina-SCI topped estimates. Sanmina-SCI, which provides electronics manufacturing services, jumped 75 cents to $4.41 for the best performance in the S&P; 500. Sales this quarter will be as much as $2.9 billion, the company said.

Intel gained 10 cents to $23.99 and Texas Instruments added 14 cents to $30.95.

* Energy companies slumped along with oil prices. Halliburton, the world’s largest oil-field-services company, dropped $3.57, or 5.5%, to $61.11 for its biggest drop in about a month. Exxon Mobil decreased 67 cents to $57.90 and was the biggest drag on the S&P; 500. Chevron fell $1.47 to $58.01.

* Hartford Financial Services Group, an insurer of homes and businesses, jumped $3.11 to $84.02. The company said it earned $1.82 a share before investment losses in the third quarter, exceeding the $1.59 expected by Morgan Stanley analyst Nigel Dally.

* Starbucks added 93 cents to $30.36. The largest U.S. coffee shop chain said October sales at stores open more than a year rose 7%, beating the same-store sales gain of 4% projected by a UBS analyst.