Stocks Close Narrowly Mixed in Thin Trading

Stocks finished flat in a thin, lackluster session Tuesday as investors took a breather following a strong rally in the previous week.

The Dow Jones Industrial Average slipped 2.65 points, or 0.02 percent, to end at 12,291.35, after trading slightly higher for most of the session. BofA and JPMorgan led the blue-chip laggards.

The S&P 500 eked out a gain of 0.10 points, or 0.01 percent, to end at 1,265.43, logging its first five-day winning streak since mid-September. The Nasdaq gained 6.56 points, or 0.25 percent, to close at 2,625.20. The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished near 22.

Among key S&P sectors, financials declined, while utilities gained.

“It’s a very light calendar [this week]…It’s still all about Europe and even in Europe it’s about Italy, so keep your eye on the euro and you can pretty much tell where everything else is going,” said Art Cashin, director of floor operations at UBS Financial Services. “[European worries will] certainly continue into the first half [of 2012]…They haven’t solved anything.”

Investors have been hoping for a Santa Claus rally as the S&P remains slightly in positive territory for 2011.

On the economic front, home prices declined in most major citiesfor the second straight month in October according to the Standard & Poor's/Case-Shiller index.

Meanwhile, consumer confidence gained in Decemberto 64.5 from a downwardly revised 55.2 in November, according to the Conference Board. Economists polled by Reuters had expected a reading of 58.3.

Investors will also be focusing on retail sales, as a day off on Monday sent many Americans out, with shops relying on bargains to lure shoppers. Large clothing chains such as Gap and Abercrombie & Fitch finished higher.

However, Sears Holdings plunged more than 25 percent after the retailer announced it would close down 100 to 120 Kmart and Sears stores due to a combination of lower sales, continued margin pressure and increased expenses.

Mead Johnson jumped after the maker of Enfamil baby formula announced its products are safe, even as health officials continue their investigation following the death of an infant.

MetLife gained after the life insurer said it plans to sell almost $7.5 billion of its banking unit depositsto GE Capital Financial as the firm looks to exit the banking business.

Oil prices settled above $100 a barrel for the first time in two weeks, giving a boost to energy stocks. Chevron and ConocoPhillips logged at gain. Meanwhile, gold traded below $1,600 an ounceas investors hesitated to jump in amid ongoing worries over the euro zone crisis.

Trading volume is expected to remain light throughout the shortened holiday week.

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On Tap This Week:

WEDNESDAY: Weekly mortgage applications
THURSDAY: Jobless claims, Chicago PMI, oil inventories, Fed balance sheet/money supply
FRIDAY: Farm prices

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