J&J deal fails
to excite market

NEW YORK » Stocks finished yesterday's session mixed in an uneven trading day, with less-than-stellar economic data pressuring stocks and upbeat corporate news, including Johnson & Johnson's $25.4 billion deal to buy Guidant Corp., giving investors reasons to buy.

While the market's overall trend remains higher, according to analysts, many investors repositioned their portfolios in advance of today's quadruple-witching day -- the quarterly expiration of index futures and options, as well as individual stock futures and options, that tends to add volatility to the market.

Johnson & Johnson's deal for Guidant, the latest in a spate of merger activity on Wall Street, gave a slight boost to blue chips, though the rest of the market moved slightly lower on a mix of data that shed little light on the economy's direction.

Analysts remained confident that the economy and the market would advance, however.

"The fundamentals remain on solid footing and I suspect the year-end rally is going to continue," said Peter Cardillo, chief strategist with S.W. Bach & Co. "Institutional investment adjustments will likely fuel the rally through the end of the year."

The Dow Jones industrial average rose 14.19, or 0.13 percent, to 10,705.64. It was the first time the Dow closed above 10,700 since Feb. 17.

The broader gauges were moderately lower. The Standard & Poor's 500 index was down 2.51, or 0.21 percent, at 1,203.21, while the Nasdaq composite index lost 16.40, or 0.76 percent, to 2,146.15.

The nation's current account deficit -- the broadest measure of trade -- climbed to a record high $164.7 billion in the third quarter of this year, reflecting robust demand for imported oil and foreign-made goods. Yet the news was considered good, as the latest snapshot of the country's trade situation was lower than the $171 billion economists had expected.

Other economic news was mixed. New claims for jobless insurance fell to a five-month low last week, an encouraging sign of recovery in the labor market. But the number of housing projects to break new ground fell by 13.1 percent in November, the lowest level of activity since May. Economists had expected a smaller drop.

Health care products bellwether Johnson & Johnson rose $2.55 to $63.45 after confirming a long-rumored plan to buy Guidant, one of the world's top makers of cardiac devices, for about $25.4 billion in cash and stock. Guidant, which makes pacemakers and cardiac defibrillators, lost 35 cents to $71.70 on the news.