US stocks closed little changed on Friday after a jury's verdict against Merck & Co, a Dow component, sent the drugmaker's shares down 7.7 percent, which offset gains in blue chip International Business Machines Corp and Caterpillar Inc.
A Texas jury ruled that Merck was negligent in the death of a man who took its painkiller Vioxx. Merck said it planned to appeal the verdict.
While the Dow Jones industrial average and the Standard & Poor's 500 index ended the day slightly higher, the Nasdaq dipped, weighed by shares of tech companies, including Apple Computer Inc and Intel Corp.
The Dow gained 4.30 points, or 0.04 percent, to 10,559.23, while the broad S&P 500 inched up just 0.69 of a point, or 0.06 percent, to finish at 1,219.71. The technology-laced Nasdaq dropped 0.52 of a point, or 0.02 percent, to close at 2,135.56.
For the week, the Dow ended down 0.39 percent, while the Nasdaq fell 0.99 percent and the S&P 500 slid 0.87 percent.
Strategists described Friday as a pause after several days in which the markets headed lower.
"We're just bouncing off an oversold condition. We've been selling off here for almost two weeks now since we peaked," said Paul D. Mendelsohn, chief investment strategist at Windham Financial Services, of Charlotte, Vermont. "Bargain hunters came in here and bought stocks down at these levels."
Friday was the last trading day for August individual equity options, which expire on Saturday. The unwinding of those positions added some volatility to the marker and helped boost shares, traders said.
IBM rose 2 percent, or $1.61, to $82.76 on the New York Stock Exchange after a Prudential analyst reiterated his "overweight" rating.
Shares of heavy-equipment maker Caterpillar rose 3.1 percent, or $1.67, to $54.82 on the NYSE after the company said it was stepping up its presence in China.
MERCK PULLS DRUG SHARES LOWER Shares of Merck slid 7.7 percent, or $2.35, to $28.06 on the NYSE after the Texas verdict in the Vioxx case.
The stock of its rival Pfizer dropped 1.3 percent, or 33 cents, to $25.55 on the NYSE, while the American Stock Exchange's Pharmaceutical Index was down 0.8 percent.
"It's important to the pharmaceutical sector. It brings up the specter of liability that is out there," said Barry Hyman, equity market strategist at Ehrenkrantz, King, Nussbaum, of New York, in reference to the Merck verdict.
OIL BOUNCES BACK Oil prices jumped after rocket attacks in the Middle East and protests in Ecuador raised concerns about supply disruptions. US crude for September delivery rose $2.08 to settle at $65.35 a barrel on the New York Mercantile Exchange.
Shares of Exxon Mobil Corp gained 1.2 percent, or 71 cents, to $58.82. ConocoPhillips rose 2.4 percent, or $1.47, to $63.07. Both trade on the NYSE.
Shares of Apple, the maker of the Macintosh personal computer and the iPod digital music players, closed down 1 percent, or 47 cents, at $45.83, helping pull the Nasdaq down. Intel, the world's dominant chipmaker and a Dow component, lost 0.9 percent, or 23 cents, to $25.65 in Nasdaq trading.
Retail shares also fell after specialty chain Gap Inc lowered its outlook for 2005.
Gap shares slid 2 percent, or 41 cents, to $19.74 on the NYSE.
Trading was moderate, with 1.22 billion shares changing hands on the Big Board, below the 1.46 billion daily average for last year. About 1.23 billion shares were traded on Nasdaq, below the 1.81 billion daily average last year.
The number of shares advancing exceeded those declining by a ratio of 9 to 7 on the NYSE and by 8 to 7 on Nasdaq.