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Stocks moved lower on Monday, hampered by a jump in crude oil prices to nearly $60 a barrel as colder temperatures in the northeast raise speculation of increased consumption. Meanwhile, Treasury yields extended gains and February gold climbed to $512.60.
The Dow Jones industrial average was down 42.5 points to 10,835.01. The broader Standard & Poor's 500 index fell 2.99 points to 1,262.09. The tech-heavy Nasdaq composite index lost 15.73 points to 2,257.64, led down by weakness in semiconductor stocks amid profit taking.
Many market watchers expect a yearend stock rally, but the market may consolidate or pull back beforehand, as the recent uptrend slowed last week, says Standard & Poor's MarketScope.
On the economic front. the November ISM non-manufacturing index dipped to 58.5 in November, after rising nearly 7 points to 60.0 in October, continuing a bumpy, but healthy pace of growth, says Action Economics. The index was below forecasts and is just off its 6-month average of 59.9. Prices paid fell to 74.2 from 78.0. New orders rose to 59.5 from 58.2. Employment climbed to a solid 57.0 from 52.9. Export orders rose to 57.0, while imports rose to 56.5. "Despite the dip in the headline index, the report reflects a very healthy services sector, but as it doesn't provide any real new information, may not have much impact on the markets," says Action Economics.
In deal news, Boston Scientifc (BSX
) offered to buy Guidant (GDT
) in a $25 billion deal, or $72 per share. The offer represents premium of about 14% over the $63.43 per share value for Guidant proposed by Johnson & Johnson (JNJ
Verizon Communications (VZ
) announced that it is considering putting its phone directory business up for sale for $17 billion.
) lost a $9.5 billion 150 aircraft order from China, which inked the deal with Europe's Airbus.
In Europe, London's FTSE-100, Germany's DAX, and France's CAC-40 indexes finished with modest losses.
In Asia, Japan's Nikkei index climbed 129.71 points (0.88%) to 15,551.31 -- a new five-year high. Stocks were boosted by a strong report on capital spending in the third quarter and yen weakness, says Standard & Poor's MarketScope. A weaker yen makes Japanese products more attractively priced in foreign markets.
The Hang Seng index fell 41.56 points (0.27%) to 15,158.82 on profit taking.
Treasury bonds fell in price on Monday. The bond market largely marked time, tracking a back-up in global bond yields amid a low-volume sell-off -- basically a continuation of the move from last week, says Action Economics. The yield on the 10-year note rose to 4.56%.