Major indexes hit two-year highs

NEW YORK – Stocks ended flat on Friday as investors shrugged off encouraging economic signs and a tax-cut package expected to lift economic growth. Trading ended shortly before President Barack Obama signed a tax bill into law.

The $850 billion package extends Bush-era tax cuts for another two years and expiring unemployment benefits through next year. House Democrats had pledged to block the tax proposal, a compromise worked out between Obama and Senate Republicans, but the House passed the bill late Thursday night. Critics said the cost didn’t justify the expected boost to economic growth.

In a hopeful sign for the economy, the Conference Board said its index of leading economic indicators rose 1.1 percent in November, the fastest pace since March. The index – which tracks data such as orders for new goods and materials – rose 0.4 percent in October.

Stocks wavered in a tight range Friday, a day after major indexes hit two-year highs.

The Dow Jones industrial average fell 7.34 points, or 0.06 percent, to close at 11,491.91.

The broader S&P 500 eked out another 2010 high. The index rose 1.04, or 0.08 percent, to close at 1,243.91. The Nasdaq composite rose 5.66, or 0.2 percent, to 2,642.97.

Rising shares barely outpaced falling ones on the New York Stock Exchange. Volume was 2 billion shares.

Bond yields fell at the end of this year’s last full week of trading. The yield on the 10-year Treasury dropped to 3.33, after notching a seven-month high of 3.56 percent on Thursday. The 10-year yield is widely used by lenders to set borrowing rates for mortgages, corporate debt and other loans.

Boeing Co. rose 1 percent to $65.03 to lead the 30 stocks that make up the Dow. American Express Co. was the index’s laggard. It fell 1.3 percent to $44.01.

The dollar rose 0.3 percent against an index of six countries’ currencies.