Stocks finished mixed Monday ahead of Tuesday's Federal Reserve meeting. Oil prices rose to above $61. Merck fell after a federal judge called a mistrial in a Vioxx case.
The Dow Jones industrial average fell 10.81 points to 10,767.77. The broader Standard & Poor's 500 index was up 1.06 points to 1,260.43. The tech-heavy Nasdaq composite index rose 4.22 points to 2,260.95.
January West Texas Intermediate crude oil jumped $1.91 to $61.30 a barrel. Talk of a potential OPEC production cut in the first quarter of 2006 was behind the rally, while security concerns were raised following the explosion at a fuel depot in the U.K., despite the fact the explosion was believed to have been accidental, says Action Economics.
The main event this week is Tuesday's Federal Open Market Committee meeting on interest rates -- another 25 basis points hike to 4.25% in the federal funds rate is expected. The market will be watching to see if Fed members change their language in its statement, which will be released around 2:15 p.m. ET.
Also on Tuesday is an update on retail sales, an important indicator in the holiday shopping season. November retail sales is expected to increase 0.4%, while the ex-auto sales is unchanged to 0.1%. The auto component is expected to finally provide a boost, given the 6% rebound in unit vehicle sales, says Action Economics. The ex-auto number will be held back by a huge price-related drop in gasoline service station sales, says Action Economics.
On Monday, drugmaker Merck (MRK) was in the news. Its shares fell after the judge in the federal Vioxx case declared a mistrial after jurors said they remained deadlocked after three days of deliberations, according to news reports.
Fellow drug maker Pfizer (PFE) rose after the company boosted its quarterly dividend by 26% to 24 cents per share for the first quarter of 2006.
In deal news Monday, ConocoPhillips (COP) is in talks to buy Burlington Resources (BR) for more than $30 billion, in a bet that natural-gas supplies will remain tight and prices high for years, reports The Wall Street Journal.
Viacom's (VIA) Paramount unit will acquire DreamWorks Animation (DWA). Viacom also set a $3 billion Class A and B stock buyback, which will begin following the separation of Viacom into 2 publicly traded companies, which expected Dec. 31.
General Motors (GM) and Tracinda Corp. say they have not been able to reach a mutually satisfactory agreement for Jerome York to join GM's board at this time; they expect talks may continue in the future.
Myogen (MYOG) shares surged after the company says a Phase 3 trial of ARIES-2, evaluating ambrisentan in pulmonary arterial hypertension, met primary endpoint of improved exercise capacity and the key secondary endpoint and several other secondary efficacy endpoints.
In Europe, London's FTSE-100, Germany's DAX, and France's CAC-40 indexes finished mixed.
In Asia, Japan's Nikkei index surged 334.65 points (2.17%) to 15,738.7 -- a five-year high. The strength reflects optimism toward economic growth and bullish positioning ahead of the Dec. 13 release of Japan's Tankan survey of business sentiment, says Standard & Poor's MarketScope.
In Hong Kong, the Hang Seng index rose 73.89 points (0.5%) to 14,984.4.
Treasury yields edged slightly higher ahead of the FOMC meeting tomorrow. "With just a day to go before the Fed takes up the policy cause for the penultimate time under Chairman Greenspan, the bond market shied away slightly from its convictions that the statement on Tuesday could acknowledge the approach of neutrality," says Action Economics. The 10-year note ticked up to 4.55%.