Wall Street report: Friday close

MARKETS closed largely flat to wrap up the worst first half of a year since President Richard Nixon was embroiled in the Watergate scandal. Brushed aside to some extent was the latest example of fuzzy accounting, this time from copier giant

The Dow Jones Industrial Average surrendered an early gain to close down 26.66 points at 9243.26, while the Nasdaq added 5.79 points to 1464.99 after touching 1375 on Wednesday.

Investors appeared relieved to close a torrid first half. Percentage losses on major exchanges collectively made it the worst opening six months since the 1970s. US market losses, as measured by the Wilshire 5000 index, total $1,500bn (£1,026bn) for the year to date, with the Nasdaq off a record 25% and the Dow down nearly 8% since 1 January.

The accounting scandals that have dogged markets all year were back in the foreground. Xerox plunged $1.03 or 13% to $6.97 after it disclosed that it had overstated revenues by $6.4bn over the past five years, far higher than previously disclosed in discussions with the Securities and Exchange Commission. But this time the disclosure did not rub off on the broader market, which was strong from the opening bell.

Adding to better sentiment were economic data either as strong or stronger than forecast. The University of Michigan's final read on consumer confidence in May came in at 92.4, surpassing expectations while representing a drop from April's 96.9. Personal income higher by 0.3% and personal spending down 0.1% were in line with most forecasts.

Bargain hunters moved into battered techs, although their gains eroded near the close. Cisco Systems firmed 13 cents or 0.9% to $13.95. Intel surrendered its opening advance to finish off 38 cents or 2% to $18.27.

Telecoms came back after the jolt earlier this week from WorldCom's accounting bombshell. WorldCom shares remained halted, but AT&T climbed 80 cents or 8% to $10.70 and rival Sprint surged $1.01 or 11% to $10.61. Battered telecoms equipment suppliers were bought as well, with Nortel Networks up five cents or 3.6% to $1.45. Lucent soared 14 cents or 9% to $1.66.

Blue-chips were helped by a strong early showing from Coca-Cola, but it too faded to end the day virtually unchanged at $56. Wal-Mart dragged on the Dow, falling $2.69 or 4.7% to $55.01 in an absence of news from the company.