Stocks Mixed As Holiday Cheer Battle Financial Woes

NEW YORK (MarketWatch) -- U.S. stocks turned mixed after a wobbly start Monday, as early signs that Thanksgiving holiday shoppers weren't as deflated as some feared were offset by continuing woes among financial firms.

The Dow Jones Industrial Average was up 22 points at 13,002, as 16 of its 30 components advanced. However, financial stocks AIG , American Express , Citigroup Inc. and JP Morgan Chase & Co. weighed on the blue chip index.

The S&P 500 index gained 1.2 points to 1,439, while the Nasdaq Composite rose 5.5 points to 2,601.

Preliminary data showed Black Friday sales were up 8.3%, according to an estimate from ShopperTrak RCT. A separate study from the National Retail Federation calculated that the average shopper spent 3.5% less than last year between Thanksgiving and Sunday, though 4.8% more customers shopped.

"Retailers will be a key leadership group for the remainder of this year," said Marc Pado, market strategist at Cantor Fitzgerald. However, "all of the negatives still exist, the dollar, oil, the credit crisis, the Fed, housing, and the consumer," he said. "What we need is just a little relief for the market to find a silver lining."

Among retail stocks, Best Buy was up 2% and JC Penney Co. gained 1.3%.

Trading volumes showed 230 million shares exchanging hands on the New York Stock Exchange and 326 million on the Nasdaq Stock market. Advancing stocks were fairly even with decliners on both the NYSE and the Nasdaq.

On Friday, U.S. stocks rallied in a shortened session, with the Dow industrials adding 181 points.

Financial woes

On the financial front, HSBC Holdings said it would move two of its structured investment vehicles onto its balance sheet and provide up to $35 billion in funding. The move comes as Citigroup is under pressure in some quarters to move $41 billion in off-balance sheet securities onto its balance sheet, according to a report in The Wall Street Journal on Monday.

UBS also downgraded both Fannie Mae and Freddie Mac to neutral from buy.

The European Central Bank said late on Friday that it may inject more funding into the European banking system, citing re-emerging tensions in credit markets.

The euro hit a new record high of $1.4878 as China paid in euros for part of a big French nuclear reactor order, and the dollar also fell to new two-year lows vs. the yen on a report China's sovereign wealth fund would invest some assets in Japanese stocks.

Crude oil futures rose 12 cents at $98.30 a barrel. Gold futures jumped $7.70 to $832.40 an ounce.

Elsewhere, Philips Electronics said it's paying $2.7 billion, or $95.50 a share in cash, for each Genlyte share -- a 52% premium to the Louisville, Ky.-based firm's close on Friday. Genlyte shares jumped over 50% to $94.10 in early trading.

Rio Tinto defended itself against an unsolicited offer from rival BHP Billiton , saying it will increase its dividend by 30% and triple its annual iron-ore output. Rio Tinto rose $6.40 to $442.45.

By Nick Godt