Can the big rally continue next week?

The big stock market rally that erupted this week on hopes the Federal Reserve will cut interest rates soon, nearly ran out of gas on Friday.

But a big push in the last half-hour of trading left many investors feeling a bit cheerful about the prospects for next week.

At the close, the Dow Jones industrials were up 60 points, 0.5%, at 13,372. The Standard & Poor's 500 Index was up 11 points, 0.8%, to 1,481, but the Nasdaq Composite Index was down 7 points, 0.3%, to 2,661.

The close was the fourth consecutive gain for the Dow and the S&P 500 -- but it was very nearly a disappointment when profit-taking seemed to take over the market, pushing the Dow to a loss of 30 points around 3:15 p.m.

So many traders made so much money since Monday that they wanted to cash in now. In recent months, many short-term investors haven't wanted to hold stocks over the weekend.

The Dow had jumped as many as 155 points at the open as traders were cheered by three events:

• Something close to a pledge from Fed Chairman Ben Bernanke that the central bank was ready to cut interest rates at its Dec. 11 meeting.

• The Wall Street Journal reported that the mortgage industry and the Bush administration were close to a deal to that would temporarily freeze interest rates on some troubled subprime home loans. That sent financial stocks soaring.

• Lower oil prices. Crude tumbled 2.5% to $88.71 a barrel in New York. That was the first close for crude under $90 since Oct. 30 and a 9.7% decline on the week. All energy prices were lower, and many energy stocks moved lower as well. Apache (APA, news, msgs) was off 1.2% to $96.79.

Crude may well fall again next week in part because the Organization of Petroleum Exporting Countries is expected to boost production at a meeting Wednesday in Abu Dhabi. The oil price drop may bring relief to motorists, said Tom Kloza of the Oil Price Information Service. He can see regular unleaded at $2.76 in the next week or so. AAA's daily gas price survey showed the national average price of regular unleaded gasoline was $3.09 a gallon on Friday. That was down slightly from Thursday but up 6.5% in the last month.

Technology stocks were hit the hardest, especially Research in Motion (RIMM, news, msgs), down 7% to $113.82; Dell Inc. (DELL, news, msgs), down 13% to $24.54; and IBM Corp. (IBM, news, msgs), the Dow's biggest laggard with a 2.2% loss to $105.18.

The market heads into December with investors feeling relieved. Some of the euphoria of Tuesday and Wednesday, when the Dow had its biggest two-day percentage gain since 2003, may have dissipated, but the blue-chip index's 90-point recovery off Friday late-afternoon low had to cheer investors.

But December is traditionally a good month for stocks. It's been the second-best month of the year for the Dow and S&P 500 since 1950, the Stock Trader's Almanac says, and the third-best month of the year for the Nasdaq.

April has been the best month for the Dow; January is tops for the Nasdaq. And November has been the best month for the S&P 500 -- although not this year.

The front end of the month can be rocky as many investors sell stocks to lock in both profits and losses.

Plus Friday brings the November payrolls and unemployment report. Briefing.com says the report should show a gain of 65,000 jobs for the months, down from 166,000 in October. That makes sense. Jobless claims have been rising in recent weeks.

Energy prices -- New York close

	Fri.	Thur.	Chg.	Month chg.	YTD chg.
Crude oil (NYMEX) (per barrel)	$88.71	$91.01	-$2.30	-6.16%	45.31%
Heating oil (per gallon)	$2.5296	$2.5771	-$0.0475	0.87%	58.31%
Natural gas (per million BTU)	$7.3020	$7.4520	-$0.1500	-12.34%	15.92%
Unleaded gasoline (per gallon)	$2.2591	$2.2648	-$0.0057	-3.46%	41.01%

November was a tough month

November is finished, and investors couldn't be happier.

It was the stock market's worst month of the year and its worst month since December 2002.

The Dow finished with a 4% loss. The S&P 500 was off 4.4%, and the Nasdaq lost nearly 7%. And that was AFTER the big rally that started on Tuesday.

Of 42 indexes that Market Dispatch tracks, 37 finished the month with losses.

Airline stocks were the worst performer for the month, with the Amex Airline Index ($XAL.X) down nearly 13%. But most of the focus was on Amex Securities Broker/Dealer Index,($XBD.X), down 11%, the Standard & Poor's Banking Index ($BIX.X), down 10.3%, and the Philadelphia Housing Sector Index ($HGX.X), down nearly 12%.

Defensive stocks were the winners. The Amex Pharmaceutical Index ($DRG.X) was the top-performing index, up just 1.3%. Procter & Gamble (PG, news, msgs) was the top performer among the 30 Dow stocks, with a 6.7% gain, followed by Wal-Mart Stores (WMT, news, msgs), up 5.2%.

Citigroup (C, news, msgs) and General Motors (GM, news, msgs) were the Dow losers, down 22% and 27%, respectively.

The Dow finished the week up 3% and is up 7.3% on the year. The S&P 500 had a 2.8% gain for the week and is up 4.4% for the year. That's a big change from its position after Monday's sell-off when it down for the year.

The Nasdaq, up 2.5% this week, is still up 10.2% on the year.

The markets for the week

	Close for week	Wk. ago close	% chg.	YTD. chg.
Dow Jones industrials	13,371.72	12,980.88	3.01%	7.29%
S&P 500	1,481.14	1,440.70	2.81%	4.43%
Nasdaq Composite	2,660.96	2,596.60	2.48%	10.17%
Russell 2000	767.77	755.03	1.69%	-2.53%
Crude oil per barrel	$88.71	$98.18	-9.65%	45.31%
10-yr. Treasury yield	3.97%	4.01%	-1.00%	-15.67%
Gold per troy ounce	$789.10	$824.70	-4.32%	23.68%

Financial stocks lead the market

By far, Friday's big stars were financial stocks.

The S&P 500 financial sector was up 2.9%, by far the best showing among the 10 sectors of the index. The top three stocks in the S&P 500 were financial stocks: Freddie Mac (FRE, news, msgs), up 18.8% to $35.07; MBIA (MBI, news, msgs), up nearly 18.8% to $36.51; Fannie Mae (FNM, news, msgs), up 18.6% to 38.42; and Countrywide Financial (CFC, news, msgs), up 16.3% to $10.82.

Freddie Mac and Fannie Mae are the nation's biggest suppliers of mortgage capital. Countrywide, of course, is the big mortgage lender, and MBIA is a mortgage insurer that would benefit if the deal on subprime loans comes to pass.

Meanwhile, JPMorgan Chase (JPM, news, msgs) was the Dow leader with a 4.5% gain to $45.62. Citigroup was up 3.1% to $33.30. American Express (AXP, news, msgs) jumped 3.7% to $58.98.

Bernanke cheers the markets

The Fed boss cheered many investors when he told an audience in Charlotte, N.C., that the central bank was staying "alert and flexible" to problems in the credit markets.

While Bernanke didn't go so far as to actually say the Fed would cut rates, most economists expect the Fed to cut the federal funds rate one last time this year. The rate is currently at 4.5%.

"The incoming data on economic activity and prices will help to shape the committee's outlook for the economy; however, the outlook has also been importantly affected over the past month by renewed turbulence in financial markets," Bernanke told the Charlotte Chamber of Commerce. The Fed, he said, "is following the evolution of financial conditions carefully, with particular attention to the question of how strains in financial markets might affect the broader economy."

Fed Vice Chairman Donald Kohn made similar comments earlier this week, sparking a 331-point rally for the Dow.

The Federal Open Market Committee will meet Dec. 11.

Dell not out of the woods yet

Dell didn't quite do enough last quarter to satisfy Wall Street. Not by a long shot, apparently, and the stock took a big hit, contributing nearly 4 points of the 13-point loss for the Nasdaq-100 Index ($NDX.X).

The company late Thursday reported earnings of $766 million, or 34 cents per share -- a 27% jump from $601 million, or 27 cents per share, the company earned in the same quarter last year.

Revenue rose 8.5% to $15.6 billion, topping analysts' estimates of $15.3 billion.

Excluding one-time charges, Dell earned 35 cents per share, which was only in line with the consensus estimate. The stock had gained 7.7% this week ahead of this earnings report.

Chief Executive Officer Michael Dell said on a conference call that the company was "making progress, but there is much to be done." It was the company's first post-earnings conference call in more than a year and the first since CEO Dell took the helm for a second time in late January.

The company said desktop PC sales fell 1% in the quarter; rival Hewlett-Packard (HPQ, news, msgs) said sales of desktop PCs rose 15% in the same time frame. On a more positive note, Dell said sales of notebook computers rose 19% in the quarter. Still, that was lower than the 49% growth H-P reported.

Michael Dell's return to the CEO post was supposed to put the company back on track after it had lost market share to H-P and struggled with earnings.

But investors are "getting impatient," said Roger Kay, an analyst at Endpoint Technologies Associates, told Bloomberg News. Michael Dell "is not delivering as much profit as The Street would like to see," Kay added.

BlackBerry maker Research in Motion's (RIMM, news, msgs) 6.8% loss to $113.82 contributed to 5.5 points to the Nasdaq-100 loss. A Piper Jaffray analyst lowered his target price for the stock to $134 from $137, saying competition is hurting sales of the company's Pearl smart phone at some wireless carriers.

Motorola gets a new chief

Shares of Motorola (MOT, news, msgs) moved up 2% to $15.97 after the cell-phone maker Friday said Ed Zander will step down from the helm as chief executive officer by the end of the year.

Motorola has lost market share to rivals Nokia (NOK, news, msgs) and Samsung as the company struggled to find a replacement for its Razr cell phone. Sales fell 17% last quarter.

"This man got the company into a pickle," Joan Lappin, president of Gramercy Capital Management, told Bloomberg News. "They're losing money, and they're continuing to lose share, and he's put the stock in the dumper."

Lappin wasn't the only person who was unhappy with Zander's performance. Billionaire investor Carl Icahn, who owns about 6% of Motorola's outstanding shares, tried to acquire a seat on the board to effect change at the company.

Zander will be replaced by Chief Operating Officer Greg Brown.

Weak dollar cashes in at Tiffany

The slumping dollar hasn't been a pretty sight, but it has foreign tourists flocking to luxury-jewelry retailer Tiffany (TIF, news, msgs) in droves. And the company's cash registers were ringing in the third quarter.

Tiffany said Friday profit rose to $98.9 million, or 71 cents per share -- a huge jump from the $29.1 million, or 21 cents per share, the company earned in the same quarter last year.

Earnings from continuing operations were at 72 cents per share, well above analysts' expectations of 25 cents per share, and revenue jumped 18% to $627.3 million.

Tiffany also boosted its fiscal 2007 guidance to $2.25 to $2.30 per share, up from a previous forecast of $2.22 to $2.27 per share.

But consumer worries still weighed on Tiffany shares, as the stock fell 4.8% to $46.43.

Another Wall Steet exec out

It looks like the mortgage-market meltdown has taken another victim.

Morgan Stanley (MS, news, msgs) late Thursday said Zoe Cruz is stepping down from her post as co-president of the financial-services giant.

"The captains are going down with the ship, (and) whether they are rising stars or not doesn't matter," David Easthope, senior analyst at business consulting group Celent, told The Associated Press. "The losses are so large and embarrassing to the organization that they are getting rid of people to satisfy the public perception that they are fixing things."

Just three weeks ago, Morgan Stanley reported a $3.7 billion in subprime-related losses.

Cruz, who was regarded as the most senior female executive on Wall Street, had previously been seen as a possible successor to CEO John Mack; she had been at the company for 25 years. Walid Chammah and James Gorman will replace Cruz as co-presidents, effective Saturday.

Morgan Stanley shares were up 0.7% to $52.72 on the day; the stock has lost more than 20% this year.

Cruz's departure follows high-profile exits by Stan O'Neal, who resigned as CEO of Merrill Lynch (MER, news, msgs), and Chuck Prince, who left the helm of Citigroup (C, news, msgs).

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

	Fri.	Thur.	Chg.	Month chg.	YTD chg.
Treasurys
13-week Treasury bill	3.070%	2.885%	0.185	-19.63%	-37.15%
5-year Treasury note yield	3.418%	3.407%	0.011	-17.97%	-27.29%
10-year Treasury note yield	3.972%	3.940%	0.032	-11.24%	-15.67%
30-year Treasury bond yield	4.403%	4.349%	0.054	-7.32%	-8.61%
Currencies
U.S. Dollar Index	76.19	75.95	0.23	-0.41%	-8.97%
British pound in U.S. dollars	$2.0576	$2.0631	-0.0055	-1.11%	5.00%
U.S. dollar in British pounds	£0.4860	£0.4847	0.0013	1.12%	-4.76%
Euro in U.S. dollars	1.4643	1.4758	-0.0115	1.16%	10.94%
U.S. dollar in euros	€ 0.6829	€ 0.6776	0.0053	-1.14%	-9.86%
U.S. dollar in yen	111.12	109.81	1.31	-3.72%	-6.64%
U.S. dollar in Canadian dollars	$0.999	$0.997	0.002	5.86%	-14.22%
Canadian dollar in U.S. dollars	$1.001	$1.003	-0.002	-5.45%	16.70%
Commodities
Gold	$789.10	$802.30	-$13.20	-0.78%	23.68%
Copper	$3.1845	$3.0940	$0.091	-8.31%	10.92%
Silver	$14.1650	$14.1650	-$0.28	-1.89%	11.67%
Crude oil (NYMEX) (per barrel)	$88.71	$91.01	-$2.30	-6.16%	45.31%

By Charley Blaine and Elizabeth Strott