Wall Street report: Friday close

INVESTORS took profits after official data portrayed an economy recovering more slowly than they had hoped. The Dow Jones Industrial Average, up just over 300 points in the prior two days, retreated 12.74 points or 0.13% to 9,907.26. The Nasdaq Index gave back 22.78 points or 1.18% to 1,911.25. The Dow rose 0.6% on the week, while the Nasdaq slipped 1.1%.

A data-packed session started with the January unemployment report showing a drop in the jobless rate from 5.8% to 5.6%, while the number of non-farm jobs lost rose a higher than expected 89,000.

The Institute of Supply Management Index, which measures manufacturing sector activity, rose to 49.9% from 48.2% in December, its highest level in about a year and a half. A figure below 50% indicates contraction.

The University of Michigan's consumer confidence index rose to 93 in January from 88.8 in January, showing the stalwart consumer slightly more confident about the future.

Taken together, the data showed an economy struggling to emerge from a shallow recession, officially pegged as beginning in March, according to economists. Paul McCulley, portfolio manager at the California-based Pimco bond funds, said that any recovery was both slight and tentative. 'The economy is is clearly healing, but we're not out of the convalescent stage,' he said. The danger still existed of a 'double dip,' with growth moderate to strong in the first half of the year and then falling off in the second half. He said that Fed chairman Greenspan should not even talk about raising interest rates this year, but should 'sit on his bottom and do nothing and say he is going to do nothing.'

Financial services, strong over the past two days in the wake of the Wednesday statement from the Fed indicating that it saw signs of a positive turn in the economy, were marked down. American Express shed 85 cents or 2.4% to $35, Citigroup lost $1 or 2.1% to $46.40 and JP Morgan surrendered $1.85 or 5.4% to $32.20.

United Airlines' parent UAL plunged $1.25 or 8.5% to $13.45 after it lodged a $2.1bn. loss for 2,001 amid suggestions in the industry that it might be the next major airline to seek bankruptcy protection.

Conglomerate Tyco, which has been dogged by accounting concerns in the wake of Enron's collapse, regained $1.80 or 5.1% to $36.95.

Walt Disney jumped $1.30 or 6.2% to $22.36 on its stronger than expected earnings report out after the close on Thursday.

Priceline.com was steady at $6.32 after it announced an alliance with the much bigger online retailer eBay to market travel services. Shares in eBay were marked down 97 cents or 1.6% to $58.05.

Waste Management tumbled $3.72 or 12.9% to $25.10 as it announced a charge to cover trading contracts with Enron.

Lear, the biggest installer of car interiors, dropped 25 cents or 0.6% to $39.91 as it made plans to lop 6,500 jobs or 6% of its workforce.

Software company Adobe Systems rose $2.23 or 6.6% to $35.93 after it re-affirmed its profit projections.

Techs were weak, with Intel off 37 cents or 1% to $34.67 and Oracle down 87 cents or 5% to $16.39.