Early rally fades; stock market down for the week

An early rally faded on the stock market Friday, leaving indexes down about 3 percent for the week as worries resurfaced about a breakup of the euro. BlackBerry maker Research in Motion plunged after slashing its forecast for holiday sales.

The Dow Jones industrial average closed down 2.42 points Friday, less than 0.1 percent, at 11,866.39. It had been up as many as 99 points after the Italian government won a confidence vote on austerity measures. That gain evaporated around midday after Fitch warned that it might downgrade the debt of Italy, Spain and four other countries that use the euro.

Materials and industrial companies rose, signaling that traders expect the economic recovery to remain on track. Utilities, health care, and consumer staples companies lagged the market as traders sold stocks that are considered to be safer when the economy is weak.

The Standard & Poor's 500 index rose 3.89, or 0.3 percent, to 1,219.65. The Nasdaq composite index rose 14.32, or 0.6 percent, to 2,555.33 The Dow is down 2.6 percent for the week; the S&P 2.8 percent. The Nasdaq lost 3.5 percent.

The yield on the 10-year Treasury note plunged to 1.85 percent from 1.93 percent earlier Friday after the government said consumer prices were unchanged last month, suggesting that inflation remains low. Low inflation makes bonds more attractive because it doesn't diminish the buying power of the fixed return a bond provides over time.

Seven of the 10 industry groups in the S&P 500 index rose, with declines in health care, consumer staples, and utilities. The biggest gains were in energy, materials and industrial companies.

Research in Motion Ltd. plummeted 11 percent after the company said late Thursday that new phones seen as critical to its future will be delayed until late next year. RIM also is taking a big loss on unsold tablet computers and predicted that its BlackBerry sales will fall sharply during the holiday sales season.

Online game developer Zynga Inc. fell 5 percent in its first day of trading on the Nasdaq. The maker of Farmville's initial public offering was priced late Thursday at $10 per share, raising $1 billion - the biggest Internet IPO since Google Inc. first offered shares in 2004.