Wall St near flat; Apple off, but momentum shares rebound

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks barely budged on Friday, with Apple's slide offset by a rebound in high-growth momentum names.

Apple Inc was the biggest drag on both the benchmark S&P 500 index and the Nasdaq 100 on news that it is close to paying a record $3.2 billion for Beats Electronics, an expensive foray into music streaming and headphone gear, two people with knowledge of the matter said.

Some analysts questioned whether Beats, valued at $1 billion during its last funding round in September, was worth that price. Apple shares fell 0.6 percent to $584.65.

But momentum names mostly advanced after a volatile week. Shares of Gilead Sciences Inc gained 1 percent to $79.48. Netflix Inc shares rose 1.6 percent to $326.63 after the company increased the price of its most popular video streaming plan by $1 a month.

 

"We've seen days of investors trying to see if there's a bottom in these Nasdaq stocks," said Rick Meckler, president of hedge fund LibertyView Capital Management in Jersey City, New Jersey.

"There's some fear among investors that their steep fall-offs are a precursor of something to the broader market, and when they rebound, even temporarily, it seems to give confidence to the overall market."

The S&P 500 has alternated between gains and losses each day this week, and the Nasdaq has dropped for three straight sessions - its longest losing streak since early April - as Internet-related stocks came under pressure.

The Dow Jones industrial average rose 9.41 points or 0.06 percent, to 16,560.38. The S&P 500 dipped just 0.19 of a point or 0.01 percent, to 1,875.44. The Nasdaq Composite Index added 11.353 points or 0.28 percent to 4,062.848.

The Russell 2000 index of small-cap companies was up 0.6 percent.

The S&P 500 and the Nasdaq were still on track to post declines for the week.

Healthcare stocks also rose, with shares of Merck up 0.6 percent at $55.14 a day after U.S. health regulators approved a blood-clot prevention drug developed by Merck for use by patients who have had a heart attack or who suffer from blockages in the arteries of the legs. The S&P healthcare index was up 0.3 percent.

Among the day's big decliners, Rocket Fuel Inc shares tumbled 25.3 percent to $20.76 after the technology provider for Web-based video advertising forecast current-quarter revenue far below expectations, prompting downgrades from Goldman Sachs and BMO Capital.

(Additional reporting by Herbert Lash and Chuck Mikolajczak; Editing by Bernadette Baum, Nick Zieminski and Jan Paschal)