Additionally, the seasonally adjusted estimate of new houses for sale at the end of December rose 2.4 percent to 516,000. The Commerce Dept. said that this represents a supply of 4.9 months at the current sales rate.

The U.S. economy grew at its slowest pace in three years in the fourth quarter, according to a report from the Department of Commerce. The report showed that the gross domestic product for the quarter grew much less than economists had been expecting.

The Commerce Dept. said that its advanced reading of the fourth quarter GDP showed an annual rate of growth of 1.1 percent, the slowest rate of growth since the fourth quarter of 2002. Economists had expected growth of about 2.8 percent compared to the 4.1 percent growth seen in third quarter.

The deceleration in GDP growth in the fourth quarter was primarily due to a slowdown in consumer spending, an acceleration in imports, a downturn in federal government spending, and a slowdown in spending on equipment and software.

The slowdown in consumer spending played a big part in the deceleration seen in the fourth quarter, with consumer spending growth coming in at 1.1 percent for the quarter. This marked the slowest pace of growth since the second quarter of 2001.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks ended Friday session sharply higher, boosted by strong U.S. corporate earnings and better-than-anticipated results from key industrial shares. The Japanese Nikkei skyrocketed 3.6% to 16,460, posting the biggest one-day advance in four years. The index recorded 556.66 points, recovering all last-week losses on the back of record-high quarterly results released by Sony. South Korea’s Kospi gained 0.35%, Singapore Straits Times advanced 0.4%, while Australia’s All Ordinaries climbed 1.15% on oil and gas prices.

European stocks closed Friday session, posting huge gains on merger-and-acquisition news, led by the world’s top steelmaker Mittal Steel’s offer to buy rival Arcelor for $22.7 billion. The German DAX 30 surged 1.8%, the French CAC 40 soared 1.6%, and London’s FTSE 100 climbed 1%.

OIL, METALS, CURRENCIES

Crude oil prices were pushed back above $67 a barrel on continuous tensions in Nigeria and Iran. Light sweet crude for March delivery gained 83 cents to $67.09 a barrel. London Brent rose 85 cents to $65.77.

European gold prices lost ground. In London gold closed at $556.95, down from $559. In Zurich the precious metal traded at $557.30, down from $558.50. In Hong Kong gold fell $2.50 to close at $559.60. Silver closed at $9.57, up from $9.52.

The U.S. dollar advanced against other major currencies. The euro was quoted at $1.2152, down from $1.2209. The dollar bought 116.88 yen, up from 116.33. The British pound stood at $1.7746, down from $1.7802.

EARNINGS NEWS

Black & Decker Corp., (BDK: chart), tool maker, reported Q4 net income of $1.27 a share, down from $1.62 a share in the year-ago period. Adjusted earnings came to $1.93 a share after charges for taxes related to repatriating foreign earnings, beating analyst estimate of $1.90 a share. Sales in Q4 advanced to $1.73 billion from about the same level in the previous period.

FPL Group Inc., (FPL: chart), electric energy producer, reported Q4 earnings of 53 cents a share, up from 47 cents a share a year-earlier, topping analyst forecasts of 40 cents a share. Q4 results incorporated a gain related to the mark-to-market impact of non-qualifying hedges. If not for the gain, the company earned 46 cents a share.

T. Rowe Price Group Inc., (TROW: chart), investment advisory services provider, reported that Q4 profit advanced to 85 cents a share, up vs. 71 cents a share a year ago, beating analyst estimate of 83 cents a share.

Microsoft, (MSFT: chart), software company, reported that Q2 earnings advanced 5% to 34 cents per share, up from 32 cents per share in the same period last year on 9% revenue growth. The company predicted earnings for the March quarter of 32-33 cents per share on revenue of $10.9-$11.2 billion.

Manor Care Inc, (HCR: chart), health care services company, reported Q4 net earnings of 40 cents a share, down from 55 cents in the year-ago period. Q4 profit included the impact of approximately 15 cents for unusual items related to debt refinancing, hurricane-related losses and a higher tax rate. Without the charge, the company matched the analyst estimate for earnings of 55 cents a share. Quarterly revenue went up to $864 million from the previous year''s $806 million.

ITT Industries Inc, (ITT: chart), manufacturer of engineered products, reported a Q4 net loss of 91 cents a share, down from last year’s profit of $1.29 a share in the same period. The quarterly loss includes the impact of special items amounting to $218.6 million, primarily related to a previously announced non-cash asset impairment charge in the company''s switches business. If not for items, ITT would have come in with earnings from continuing operations of $1.43 a share, beating on that basis analyst estimate for earnings of $1.41 a share.

Compuware Corp, (CPWR: chart), information technology software maker, posted Q3 net earnings of 10 cents a share, down 9.6% from 11 cents a share a year ago, in line with the analysts’ forecasts. Revenue dropped 7.5%. Compuware announced that it made organizational changes aimed at improving sales, but doesn''t plan any layoffs.