Market ekes out a gain; gold hits $808

Stocks ended Friday basically unchanged, but traders went into the weekend hardly feeling confident about next week.

The reasons: The dollar continued to fall, pushing gold over $800 an ounce for the first time since January 1980. Crude oil closed at a record $95.80 a barrel in New York.

A jobs report was better than expected, and technology stocks finished out a decent week. But weakness in financial stocks, which caused Thursday's big sell-off, persisted and may well pressure the market over the next week or so.

At Friday's close, the Dow Jones industrials were up 27 points to 13,595. The small change masks dramatic volatility throughout the day. The Dow was down 109 points in the late morning and 77 points at 2:50 p.m. Then it rallied 105 points to the close.

The Standard & Poor's 500 Index was up 1.2 points at 1,510, and the Nasdaq Composite Index was up nearly 16 points to 2,810.

For the week, the Dow was down 1.5%. The S&P 500 was off 1.7%, but the Nasdaq managed a small gain. For the year, the Dow is up 9.1%. The S&P 500 is up 6.4%, and the Nasdaq is up 16.4%.

Citigroup CEO set to leave

The Dow started to come back when Citigroup (C, news, msgs) saw its shares move up from $36.91 to a close of $37.54, a loss of 2.5% on the day. The rally seemed started by news that the banking giant's board would hold an emergency meeting this weekend, possibly to discuss the future of CEO Chuck Prince.

After the close, however, The Wall Street Journal said that that Prince will resign this weekend, ending a stormy four-year tenure. Citigroup shares jumped 3.5% to $39.04 in after-hours trading.

Prince's leaving the banking giant would be the second major resignation of a financial executive during the week. E. Stanley O'Neal resigned as CEO of Merrill Lynch (MER, news, msgs) on Monday.

While Prince's tenure was probably going to be part of the discussion at this weekend's board meeting, there was also talk that the meeting also could be about more asset write-downs. The company already has taken a $5.9 billion write-down because of bad investments related to the subprime-mortgage mess.

Citigroup shares fell 8% on Thursday on reports it might cut its dividend or make other moves to add $30 billion in capital to its balance sheet.

With Friday's close, the shares had fallen 11.5% for the week. Since Oct. 11, the day before the banking giant reported its big write-down, the company has lost more than 22% of its market value.

Gold makes a move as the dollar falls

Gold closed at $808.50 an ounce, up 2.4% from Thursday, as investors sought a haven from credit-market turmoil related to the subprime-mortgage collapse.

The big move for gold came despite a decent report on payroll employment. The U.S. economy added 166,000 jobs in October -- the fastest pace of growth in five months -- boosted by gains in the service industry.

Gold hit an all-time high of $873 on Jan. 21, 1980. Adjusted for inflation, that would be about 2,185 an ounce today, according to the Federal Reserve Bank of Minneapolis' inflation calculator.

Gold's rise to the highest level since January 1980 pushed gold-related stocks sharply higher. The Amex Gold Bugs Index($HUI.X) was up 4.1% to 439. Newmont Mining (NEM, news, msgs) was up 4.2% to $51.61. Freeport-McMoRan Copper & Gold (FCX, news, msgs) was up 0.7% to $112.80.

Economists had expected job growth ranging from 80,000 to 93,000 for last month, after growth of 110,000 in September.

• Video: Inside Friday's jobs report

More than half of the industries tallied in the jobs report added jobs in October, but jobs fell in manufacturing, construction and banking.

The unemployment rate held steady at 4.7%.

Crude oil, meanwhile, was up $2.20 Friday to a record $95.93, and related commodities, including gasoline and natural gas also moved higher.

The crude gain pushed the Amex Oil Index ($XOI.X) up 1.3% to 1,471. The Philadelphia Oil Service Sector Index ($OSX.X) finished up 2.6% to 297.

Independent oil and gas producer Apache (APA, news, msgs) jumped 4.6% to $103.82. Schlumberger (SLB, news, msgs) jumped 2.8% to $98.82.

The rise in the prices of gold and crude oil are a reflection of the falling value of the U.S. dollar. The dollar was down again on Friday. The U.S. Dollar Index, which measures the dollar against a basket of currencies, fell to 76.30 on Friday from 76.56 on Thursday. It was off 0.9% on the week and is down 8.2% on the year.

Techs are strong again

Tech stocks had a good day on Friday, continuing the momentum that began in mid-August.

Google (GOOG, news, msgs) ended up 1.1% at $711.25. Yahoo (YHOO, news, msgs) jumped 3% to $31.11, and Microsoft (MSFT, news, msgs) was unchanged at $37.06. (Microsoft is the publisher of MSN Money.)

Research in Motion (RIMM, news, msgs), up nearly 4% to $126.95, added more than 3 points to the Nasdaq-100 Index ($NDX.X), which finished the day with a 17-point gain to 2,214. The index, which tracks the biggest Nasdaq stocks, was up 0.9% on the week and is up nearly 20% since the market hit a bottom in mid-August.

For the year, the index has risen 26%.

The markets for the week

	Close for week	Wk. ago close	% chg.	YTD. chg.
Dow Jones industrials	13,595.10	13,806.70	-1.53%	9.08%
S&P 500	1,509.65	1,535.28	-1.67%	6.44%
Nasdaq Composite	2,810.38	2,804.19	0.22%	16.36%
Russell 2000	797.78	821.39	-2.87%	1.28%
Crude oil per barrel	$95.93	$88.60	8.27%	57.13%
10-yr. Treasury yield	4.29%	4.39%	-2.23%	-8.90%
Gold per troy ounce	$808.50	$764.00	5.82%	26.72%

Will the S&P 500 fall to 1,440?

Watch the S&P 500 next week because the index could test a support level of 1,480. If it falls through that level, it could drop to as low as 1,440.

The catalyst to drop the index to such levels would be continued weakness in financial stocks. The financial sector of the S&P 500 was down 1.6% on Friday and is down 14% on the year. There is great reluctance among many money managers and analysts to recommend any stocks in the group.

The reason: They've all lost a lot of money from the group. The market capitalization of the sector has dropped more than $400 billion since peaking in early June. The group now represents 18.9% of the market capitalization of the S&P 500, down from 21.3% in June.

Bill Miller likes the financials -- honest

There was, however, one contrarian view about financial stocks today: Bill Miller, the legendary manager of the Legg Mason Value Trust (LMVFX) fund.

Miller thinks financial and consumer discretionary stocks, the weakest sectors in the market now, will have the biggest gains over the next five years.

"The new leadership will be U.S., large-cap, dollar-based, and grow to encompass what no one wants to own today," he said in a letter to his fund's shareholders. The letter was released in the late morning and helped the market recover much of its losses.

Miller beat the S&P 500 for 15 straight years but is on track to trail the index for a second year in a row. The fund was up 3.8% for the year as of Thursday.

Citigroup is his 15th largest holding; JPMorgan Chase (JPM, news, msgs) is his sixth-largest holding.

He also has large holdings in Countrywide Financial (CFC, news, msgs) and several home builders, including Centex (CTX, news, msgs) and KB Home (KBH, news, msgs).

Citi downgrade defended

One of the drivers of Thursday's decline for Citigroup was the downgrade by CIBC World Markets analyst Meredith Whitney, who said the bank might have to cut its dividend or sell assets to raise capital.

The downgrade shook the markets, which had already been dealing with the massive write-downs by financial-services companies for the past few weeks.

Whitney defended her call on Citigroup, despite the market plunge that it triggered. "No one had the moxie to put in print what I put in print," she told Bloomberg News.

Although other financial-services analysts have been down on Citi, Whitney said that nobody else would come out and say what she thinks Citi might have to do -- cut its dividend.

• Video: Global growth goes on

Like Deutsche Bank's Mike Mayo and other analysts, Whitney blames much of Citi's mess on CEO Prince. "There's no question he has to leave," Whitney told Bloomberg. "They've got to restore capital levels. They've got to invest a lot in technology. Their earnings aren't growing, their revenues aren't growing."

But not everyone agrees with her.

"I don't believe that to be true -- that they will need to cut the dividend," Anton Schutz, president of Mendon Capital Advisors, told Bloomberg. "There's no doubt that there's a lot of uncertainty here, but overall this company generates a ton of capital and can certainly weather a storm."

Merrill takes another hit

As if things weren't looking bad enough for Merrill Lynch, The Wall Street Journal reported on Friday that Merrill will likely come under the Securities and Exchange Commission microscope.Merrill shares fell an additional 7.9% to $57.28 Friday, as investors worried about how much damage the bank's risky investments may cause to profits. The stock fell more than 13% for the week and is off 42% since peaking in mid-January.

According to the Journal report, Merrill tried to do some deals with hedge funds to prevent having to report huge write-downs on bad calls on mortgage-backed securities. The SEC is expected to include the issue in an existing investigation into how Merrill and other financial-services companies valued mortgage securities.

• Get free, real-time stock quotes on MSN Money

Meanwhile, Deutsche Bank's Mayo estimates that fourth-quarter write-downs will be hefty. Mayo wrote in a note to clients Friday that there will be at least $10 billion in new write-downs this quarter, with Citi and Merrill Lynch each writing down $4 billion.

Last week, Merrill reported write-downs of $8.4 billion in the third quarter, much greater than the company had predicted. That prompted O'Neal's leaving the company.

Friday, Standard & Poor's strategist Sam Stovall downgraded the financial-services sector to "underweight" from "marketweight." Stovall cited "questionable earnings growth prospects" and "still-high relative valuations" for the downgrade.

Energy prices -- New York close

	Fri.	Thur.	Chg.	Month chg.	YTD chg.
Crude oil (NYMEX) (per barrel)	$95.93	$93.49	$2.44	1.48%	57.13%
Heating oil (per gallon)	$2.5737	$2.5123	$0.0614	2.63%	61.07%
Natural gas (per million BTU)	$8.4180	$8.6370	-$0.2190	1.06%	33.64%
Unleaded gasoline (per gallon)	$2.4395	$2.3432	$0.0963	4.25%	52.27%

Chevron profit drops

Oil giant Chevron (CVX, news, msgs) reported a 26% decline in profit in the third quarter because of "weak refining and marketing conditions," the company said.

Chevron earned $3.7 billion, or $1.75 per share, down from $5 billion, or $2.29 per share, a year ago.

Excluding charges, Chevron earned $1.94 a share. Analysts had expected earnings of $2.07 per share.

"Margins were squeezed as escalating costs for crude-oil feedstocks could not be fully recovered in a U.S. marketplace that was well supplied with gasoline and other refined products," CEO Dave O'Reilly said in a press release.

Shares fell 0.6% to $87.48 on Friday, even as crude oil hit a new high.

The Chevron report came a day after ExxonMobil reported a 10% drop in its quarterly profit, missing Wall Street expectations and helping set off a big Dow tumble.

Weekly changes for S&P 500 Index and sectors

	Close	Chg. for wk.	YTD chg.
S&P 500 Index	1,509.65	-1.67%	6.44%
Energy	575.56	-2.17%	26.35%
Materials	264.01	-1.34%	21.91%
Industrials	365.99	-0.24%	13.44%
Consumer discretionary	281.60	-2.18%	-7.04%
Consumer staples	290.74	-1.15%	8.32%
Health care	411.24	-0.76%	5.79%
Financials	424.24	-6.04%	-14.35%
Information technology	437.50	1.82%	22.80%
Telecommunications	171.26	-1.60%	10.39%
Utilities	212.46	2.12%	13.86%

NYSE Euronext beats The Street

NYSE Euronext (NYX, news, msgs) reported third-quarter profit of $258 million, or 97 cents per share, up from $68 million, or 43 cents per share, in the same quarter last year.

Excluding charges, the operator of the New York Stock Exchange earned 76 cents per share, beating the consensus estimate of 73 cents per share.

Revenue surged to $1.2 billion from $602 million last year, handily topping analysts' estimates of $823.5 million. Shares were down 0.5% to $90.46 on Friday.

Short hits from the markets -- 4 p.m. ET

	Fri.	Thur.	Chg.	Month chg.	YTD chg.
Treasurys
13-week Treasury bill	3.500%	3.705%	-0.205	-8.38%	-28.35%
5-year Treasury note yield	3.917%	4.032%	-0.115	-6.00%	-16.68%
10-year Treasury note yield	4.291%	4.361%	-0.070	-4.11%	-8.90%
30-year Treasury bond yield	4.595%	4.646%	-0.051	-3.28%	-4.63%
Currencies
U.S. Dollar Index	76.24	76.56	-0.32	-0.34%	-8.23%
British pound in dollars	$2.0899	$2.0794	0.0104	0.44%	6.65%
Dollar in British pounds	£0.4785	£0.4809	-0.0024	-0.44%	-6.23%
Euro in dollars	1.4516	1.4426	0.0090	0.28%	9.97%
Dollar in euros	€ 0.6889	€ 0.6932	-0.0043	-0.28%	-9.07%
Dollar in yen	¥114.88	¥114.52	0.36	-0.46%	-3.48%
Commodities
Gold	$808.50	$793.70	$14.80	1.66%	26.72%
Copper	$3.3250	$3.3625	-$0.037	-4.26%	15.81%
Silver	$14.5990	$14.3250	$0.27	1.12%	10.75%
Crude oil (NYMEX) (per barrel)	$95.93	$93.49	$2.44	1.48%	57.13%

By Charley Blaine and Elizabeth Strott