NEW YORK, Dec 29:US stocks closed almost unchanged on Friday, losing earlier gains after an unexpectedly sharp drop in new home sales renewed worries about the impact of the persistent housing slump on the economy.

The Dow Jones Industrial Average rose 6.26 points (0.05 per cent) to 13,365.87, while the tech-heavy Nasdaq composite dropped 2.33 points (0.09 per cent) to 2,674.46, according to final figures.

The broad-market Standard & Poor’s 500 index climbed 2.12 points (0.14 per cent) to 1,478.49.

“Volume, it should be noted, was on the light side with only 1.0 billion shares traded at the NYSE. That is a reflection of the holiday conditions and suggests there wasn’t a lot of conviction behind Friday’s action,” Briefing.com analysts wrote.

Stocks opened on a bullish note but ran out of steam after a Commerce Department report showing new-home sales in November plunged by nine per cent to a seasonally adjusted annual rate of 647,000 units.

It was the slowest pace since April 1995 and far exceeded Wall Street expectations of a 1.8 per cent decline, to 715,000 units.

Stocks quickly give up a large portion of their gains on the disappointing new-home sales data, analysts at Briefing.com wrote, adding the sales are down more than 53 per cent from their all-time high reached in July 2005.

New home sales are possibly the worst sector of the economy, Briefing.com’s Dick Green said.

Analysts are closely monitoring the prolonged housing slump and its subsequent credit crunch for signs that it will lead consumers to reduce spending, which accounts for two-thirds of US economic activity.

Shares in US giant Citigroup lost 0.91 per cent at $29.29 after The Wall Street Journal reported that US and European banks that had been hit by the US housing-related credit turmoil, possibly including US giant Citigroup and HSBC of Britain, plan to dispose of assets.

The newspaper said Citigroup may unload or shut several midsize units as part of a move that executives estimate could lead to the disposal of as much as 12 billion dollars in so-called non critical assets.

Bond prices advanced. The yield on the 10-year US Treasury bond fell to 4.096 per cent from 4.199 per cent late Thursday and that on the 30-year bond dropped to 4.514 per cent from 4.614 per cent. Bond yields and prices move in opposite directions.

—AFP