Dow down for week

The Dow Jones industrials’ eight-week winning streak ended Friday, although Wall Street managed a modest gain following news that President Bush had shaken up his economic team.

The announcement that Treasury Secretary Paul O’Neill and White House adviser Larry Lindsey had resigned lifted the market from an early slump caused by a disappointing unemployment report.

The Dow climbed 22.49, or 0.3 percent, to close at 8,645.77, following a five-day loss of 308 points. But for the week, the Dow fell 2.8 percent, to snap its eight-week winning streak.

Above, traders at the New York Stock Exchange watch the market fall after the Labor Department reported a rise in unemployment.

Computer: IBM to buy software firm

IBM Corp. said Friday that it would purchase Rational Software Corp., a maker of development tools, for $2.1 billion in cash – its biggest software acquisition since purchasing Lotus in 1995.

IBM agreed to pay $10.50 per share for Rational, a price 28 percent above the software maker’s Thursday closing price of $8.17. IBM paid $3.5 billion for Lotus.

Shares of IBM fell 74 cents, to close Friday at $82.32 on the New York Stock Exchange. Rational shares surged $2.12, or 26 percent, to $10.29 on the Nasdaq Stock Market.

Rational’s tools are used to hone development of software used in everything from corporate mainframes to defense and aerospace systems, medical devices and cell phones.

Stock offering: Chicago Merc goes public

Shares of the Chicago Mercantile Exchange surged in their trading debut Friday when the country’s largest futures exchange became the first U.S. financial market to sell stock in itself.

The Chicago exchange sold 4.75 million shares to the public, or 15 percent of its common stock, at $35 a share, raising $166.3 million in its initial share sale. The offering was led by Morgan Stanley and UBS Warburg.

The funds will go toward developing technology to help one of the world’s busiest futures markets better compete against local and global rivals, such as the Chicago Board of Trade and Germany’s all-electronic Eurex, the world’s No. 1 futures market.

Drug maker: Shareholders approve Pfizer purchase deal

Pfizer Inc. said its shareholders voted Friday to approve its proposed $55.5 billion purchase of rival Pharmacia Corp. in a deal that would make the world’s biggest drug maker even bigger.

Pharmacia shareholders are expected to approve the deal when they vote Monday, and the deal is expected to be completed by the end of the first quarter next year. Regulators in the U.S. and Europe still are reviewing it.