Volatile stocks week ends in decline

? Wall Street ended a tumultuous week with a sharp decline Friday, backtracking following two days of stunning gains as investors turned cautious and cashed in some of their winnings.

The Dow Jones industrial average managed to record its first weekly advance of 2008, even as the index fell more than 170 points on the day.

The Dow fell 171.44, or 1.38 percent, to close Friday at 12,207.17, and broader stock indicators also fell. The Standard & Poor’s 500 index lost 21.46, or 1.59 percent, to 1,330.61. The technology-heavy Nasdaq composite index fell 34.72, or 1.47 percent, to 2,326.20.

Despite huge moves seen during the week, stocks finished not far beyond where they began. The Dow added 108 points, or 0.89 percent, for the week. The S&P 500 ended the week up 0.41 percent and the Nasdaq lost 0.59 percent.

The week opened with a 465-point drop in the Dow soon after the market opened Tuesday, and showed that the stock market remains fractious but may be going through a healthy process of trying to establish a bottom following weeks of sharp declines.

Investors had an initial burst of enthusiasm Friday, sending each of the major indexes up more than 1 percent, after upbeat profit reports from big names like Microsoft Corp. and word of a possible buyout of a troubled bond insurer.

But the advance proved short-lived and the eventual decline wasn’t surprising given that investors who put down bets ahead of the weekend were coming off two days of big gains – including 400 points in the Dow.

“People may be looking to take some profits off the table in this volatile market. And there’s a lot of activity that’s coming up next week,” Scott Fullman, director of investment strategy for I. A. Englander & Co., said during the day’s back-and-forth trading.

President Bush is scheduled to deliver his State of the Union address Monday. Meanwhile, the Federal Reserve is expected to conduct its first regularly scheduled meeting of the year Tuesday and Wednesday, and the Labor Department will weigh in on the state of the job market Friday.

The Fed is expected to cut rates again at next week’s meeting; many expect a half-point cut.