* Stimulus optimism fuels financials, Google lifts Nasdaq
* GE drags on Dow after cautious outlook
* Dow off 0.6 pct, but S&P up 0.5 pct, Nasdaq up 0.8 pct
* For up-to-the-minute market news, click []
(Adds context on Dow's performance, more details on oil)
By Chuck Mikolajczak
NEW YORK, Jan 23 (Reuters) - Wall Street ended a difficult
week with the broad S&P 500 closing higher on Friday as
investors bought beaten-up financials on hopes of further aid
from Washington, offsetting a disappointing outlook from
General Electric <GE.N> that kept the Dow under water.
GE's stock dropped almost 11 percent after the economic
bellwether reported earnings that met Wall Street's
expectations, but warned of an "extremely difficult" 2009.
News that President Barack Obama and his economic advisers
will meet on Saturday fueled hopes that the new administration
will put together another rescue package for the ailing
financial sector. The S&P Financial Index <.GSPF> rose 3.4
percent.
"Financials are getting a lift in anticipation of more
creative federal involvement from the Obama White House next
week," said Peter Kenney, managing director at Knight Equity
Markets in Jersey City, New Jersey.
"People are expecting the financials to get significant
help."
The Dow Jones industrial average <> shed 45.24 points,
or 0.56 percent, to 8,077.56. But the Standard & Poor's 500
Index <.SPX> rose 4.45 points, or 0.54 percent, to 831.95. The
Nasdaq Composite Index <> added 11.80 points, or 0.81
percent, to 1,477.29.
For the week, the Dow dropped 2.5 percent, the S&P 500
slipped 2 percent and the Nasdaq fell 3.4 percent.
The Nasdaq was the best-performing index, led higher on
Friday by large technology companies, including Google Inc
<GOOG.O>, whose shares rose 5.9 percent to $324.70 after the
Silicon Valley company's quarterly earnings beat estimates.
BANKS AND BIG OIL SHINE
JPMorgan Chase <JPM.N> and Bank of America <BAC.N> were
among the top-performing financial stocks. Some analysts cited
market talk of further government cash injections to banks,
while others said investors were tempted by stocks whose
prices were slashed in this week's sell-off.
JPMorgan Chase <JPM.N>, gained 5.1 percent to $24.28 and
gave the greatest support to the Dow, while Bank of America's
stock shot up 9.3 percent to $6.24, while Citigroup <C.N>
jumped nearly 12 percent to $3.47, all in NYSE trading.
Chevron <CVX.N> ranked among the Dow's best performers as
March crude oil futures <CLc1> rose more than 6 percent, or
$2.80, to settle at $46.47 a barrel, aided by expectations of
a cold snap in the U.S. Northeast.
Chevron gained 1.2 percent to $70.82. An S&P index of
energy stocks <.GSPE> advanced 2.2 percent.
THE DOW'S BIG SWING
In the afternoon,, the Dow briefly turned positive and
quickly climbed almost 30 points, rising as high as 8,152.59.
But the blue-chip average couldn't overcome the drag of GE and
investors' concerns about the weak business outlook in 2009
for some major industrial companies.
During Friday's session, the Dow swung 243.56 points from
its intraday high to its session low of 7,909.03 -- its lowest
level intraday since Nov. 21, 2008. For January so far, the
Dow is down 8 percent month-to-date.
With respect to General Electric, investors also fretted
about a possible dividend cut despite reassuring comments by
GE's chief executive. The Dow component is considered a
barometer of the U.S. economy's health because its businesses
range from financial services with its GE Capital unit to
media and entertainment through NBC Universal and the
manufacturing of products as diverse as jet engines, medical
imaging equipment and light bulbs.
On Friday, GE warned that 2009 would be "extremely
difficult."
GE's stock lost 10.8 percent to $12.03.
Fellow Dow component United Technologies Corp <UTX.N>,
which was downgraded to "market perform" by Bernstein
Research, lost 3.2 percent to $47.41.
Also weighing on the Dow was Caterpillar <CAT.N>, which
dropped 4.2 percent to $35.66 after rival Komatsu Ltd <6301.T>
lowered its profit forecast for the year, citing a sharp
decline in global demand. []
Trading volume was light on the New York Stock Exchange,
with about 1.42 billion shares changing hands,
slightly below last year's estimated daily average of roughly
1.49 billion, while on the Nasdaq, about 2.19 billion shares
traded, slightly below last year's daily average of 2.28
billion.
Advancing stocks outnumbered decliners on the NYSE by a
ratio of about 8 to 7. But on the Nasdaq, the trend was the
opposite, with about seven stocks falling for every six that
rose.
(Editing by Jan Paschal)
