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Stocks react to flat retail sales

An index of chain-store sales rose 2.8 percent last week - still shy of hopes for December.

NEW YORK - Stocks finished largely flat yesterday as investors returned from the Christmas holiday to news of weaker-than-expected retail sales. A jump in oil prices also concerned Wall Street.

The International Council of Shopping Centers said its index of retail-chain-store sales rose 2.8 percent last week, rounding out a sluggish December performance that puts merchants on track for a smaller sales gain than the trade group originally expected. Still, there is some hope sales will rebound as shoppers start spending with holiday gift cards.

Other reports proved disappointing. Target Corp. indicated its sales may have fallen in December, while MasterCard Inc. said holiday spending - including credit, cash and checks - climbed a modest 3.6 percent between Thanksgiving and Christmas, weighed by a slowdown in sales of women's apparel. That compares with a rise of 6.6 percent over the same period last year.

A report that U.S. home prices fell for the 10th consecutive month in October also appeared to limit stocks' gains.

The Dow Jones industrial average rose 2.36, or 0.02 percent, to 13,551.69. Broader stock indicators also showed gains. The Standard & Poor's 500 index rose 1.21, or 0.08 percent, to 1,497.66, and the Nasdaq composite index rose 10.91, or 0.40 percent, to 2,724.41.

The dollar was mixed against other major currencies, while gold prices rose.

A barrel of light, sweet crude rose $1.84 to settle at $95.97 on the New York Mercantile Exchange. Oil rose to a one-month high of $96.54 during the session.

Wall Street looked not only for signals about the consumer, but also insights about the broader economy.

The Standard & Poor's/Case-Shiller home-price index posted a decline of 6.7 percent, marking the steepest monthly decline since early 1991.

Among chain stores, Target fell $1.31, or 2.50 percent, to $51.16 after the nation's No. 2 retailer said same-store sales - those from stores open at least a year - would range from a 1 percent increase to a 1 percent decrease for the five weeks through Jan. 5. Earlier expectations had called for a gain of 3 percent to 5 percent.

Apple Inc. traded above $200 for the first time yesterday as investors appeared upbeat about the company's prospects to continue brisk sales of its iPods and computers. The stock finished up 15 cents at $198.95 after trading as high as $200.96.

Acquisition news perhaps helped ease some of investors' concerns. Warren Buffett's Berkshire Hathaway Inc. on Tuesday agreed to pay $4.5 billion to buy 60 percent of Marmon Holdings Inc., a privately held company with more than 125 manufacturing and service businesses.

The Russell 2000 index of smaller companies rose 2.64, or 0.33 percent, to 797.03.

Japan's Nikkei stock average closed up 0.65 percent. European stock markets were closed for an extended holiday.