Dow Slips but Remains Above 12,000; Oil Sinks

Stocks preserved their fourth straight weekly gain Friday as earnings from Google and 3M beat analysts’ estimates and oil dropped below $57 a barrel, lifting companies that depend on consumer spending.

“Everyone’s waiting for things to slow down here, but the information we are getting from corporate America is that things are fine,” said Philip Tasho, who helps manage $450 million as chief investment officer of Tamro Capital Partners. Oil prices fell to an 11-month low in a sign of doubts about OPEC’s willingness to carry out a 4% production cut. Crude oil futures sank $1.68, to $56.82 a barrel in New York trading -- the lowest price since Nov. 29, 2005.

Merck reached a two-year high after saying earnings will rise more than had been forecast. Coca-Cola rallied after Merrill Lynch recommended it.

The Dow Jones industrial average fell after Caterpillar, the best-performing member during the last four years, surprised Wall Street and said a slowing U.S. economy may reduce earnings growth. The Dow slid 9.36 points, or 0.1%, to 12,002.37. Caterpillar alone knocked 80 points off the measure for the day.

The Standard & Poor’s 500 index rose 1.64 points, or 0.1%, to 1368.60. The Nasdaq composite index gained 1.36 points, or 0.1%, to 2,342.30. For the week, the S&P; 500 increased 0.2% while the Dow average gained 0.4% and the Nasdaq fell 0.6%.

U.S. government bond prices hovered near unchanged as investors moved to the sidelines ahead of next week’s Federal Reserve meeting. The benchmark 10-year U.S. Treasury note was flat at a yield of 4.79%.

Google jumped $33.61, or 7.9%, to $459.67 for the S&P; 500’s biggest gain. Net income at the world’s most popular Internet search engine almost doubled to $733.4 million, Google said after regular trading Thursday.

Citigroup raised its price projection for Google shares to $600. “If retail this holiday season shapes up to be exceptionally strong, then Google could be a major beneficiary,” analysts wrote.

3M, maker of products from Post-it Notes to electronic road signs, advanced $2.07 to $78.47 after saying third-quarter net income rose 6.4% on acquisitions and sales of optical film for flat- panel television screens.

Merck gained $1.15 to $45.64. It raised its 2006 earnings forecast for the third time this year, to $2.18 to $2.25 a share from the prior $2.10-to-$2.24 projection.

With Friday’s rally, the drug maker’s shares reclaimed all the ground they lost after Merck’s September 2004 withdrawal of Vioxx, the world’s second-best-selling painkiller at the time, because of a potential link to heart attacks and strokes.

Coca-Cola gained $1.84 to $46.75. Merrill Lynch added the shares to a recommended list a day after profit at the world’s biggest soft-drink maker beat analysts’ estimates. A Merrill analyst increased forecasts for 2006, 2007 and 2008 earnings.

Caterpillar, the world’s biggest maker of earthmoving equipment, tumbled more than 14%, the most since October 1987. The shares lost $10.02 to $59.

The company’s results come a day after financial companies including Citigroup posted disappointing earnings and a report on leading economic indicators signaled a slowdown.

A weakening economy may end the streak of 10%-plus growth in quarterly earnings. Profit for the S&P; 500 companies will increase 8.8% in the first three months of 2007, according to Thomson. Double-digit rises in the third and fourth quarters would push the streak to 14 quarters, the longest in five decades.

Falling oil prices dented energy stocks but lifted those of transportation companies.

Exxon Mobil lost 18 cents to $69.55 and Valero Energy slipped 85 cents to $52.09. But the Amex airline index rose 3.1%. AMR, the parent of American Airlines, advanced $1.42 to $27.70. Continental added $2.40 to $35.05. JetBlue Airways climbed 26 cents to $10.92.

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Reuters and the Associated Press were used in compiling this report.