Stocks finished mostly higher Monday amid takeover activity, higher oil prices and rising bond yields. Global market strength helped set a bullish backdrop, says Standard & Poor's MarketScope.
The Dow Jones industrial average slipped 0.32 points, or less than 0.01%, to 11,076.02, weighed down by losses at General Motors (GM
) and McDonald's (MCD
). The broader Standard & Poor's 500 index edged higher 2.55 points, or 0.2%, to 1,284.13. The tech-heavy Nasdaq composite index added 4.99 points, or 0.22%, to 2,267.03.
Recent economic patterns seem likely to persist, some economists say. "We don't think we're at an inflection point yet, a change in the general direction," says David Malpass, chief global economist with Bear Stearns. "In many ways, 2006 trends are a continuation of the 2005 trends," including rising interest rates, solid growth and "grudging" stock gains.
A fresh batch of M&A activity started off the week. Credit card issuer Capital One Financial (COF
) agreed to buy North Fork Bancorp (NFB
), the sixth-biggest bank in the New York City area, in a deal valued at roughly $14.6 billion. Capital One shares fell, while North Fork surged.
In the newspaper industry, McClatchy (MNI
) agreed to buy Knight Ridder (KRI
) for $14.6 billion. Rival Gannett (GCI
) posted a slight incrase in revenue for the period ended Feb. 26.
NYSE Group (NYX
) climbed amid reports the newly public stock exchange might make a bid for the London Stock Exchange, which is also in talks with the Nasdaq Stock Market (NDAQ
In Germany, drugmaker Merck KGaA made a $17.4 billion bid for rival Schering AG (SHR
), which rejected the offer. The attempt supports an outlook for consolidation, says S&P MarketScope. Both drugmakers are independent of similarly named U.S. companies Merck (MRK
) or Schering-Plough (SGP
Also in pharmaceuticals, Watson Pharmaceuticals (WPI
) agreed to acquire Andrx (ADRX
) in a $1.9 billion deal.
Outside M&A activity, AstraZeneca (AZN
) was higher after it said a study showed that two years' treatment with its Crestor cholesterol drug reversed plaque build-up in arteries. Abbot Laboratories (ABT
) received regulatory clearance to market its FreeStyle Freedom blood glucose monitoring system for consumer use.
On the brokerage front, Apple (AAPL
) got a boost from Citigroup (C
), which upgraded the computer maker to buy. Chip maker Advanced Micro Devices (AMD
) was downgraded by ThinkEquity from buy to sell and by Punk Ziegel from buy to accumulate.
Among other companies in the news, airplane maker Boeing (BA
) was little changed after a report that it's poised for a turnaround.
The economic calendar was quiet after Friday's solid jobs report. On Tuesday, February retail sales are expected to drop 0.7%, says Action Economics, while January business inventories rise 0.3%. The fourth-quarter current account deficit is forecast to hit a record $218 billion.
In the energy markets Monday, April West Texas Intermediate crude oil futures closed up $1.81 at $61.77 a barrel, as geopolitical concerns lingered.
European markets finished higher. In London, the Financial Times-Stock Exchange 100 index rose 44.9 points, or 0.76%, to 5,952.8. Germany's DAX index added 50.24 points, or 0.87%, to 5,855.16. In Paris, the CAC 40 index climbed 38.2 points, or 0.75%, to 5,107.47.
Asian markets finished higher. Japan's Nikkei 225 index rose 245.88 points, or 1.53%, to 16,361.51. In Hong Kong, the Hang Seng index added 97.02 points, or 0.63%, to 15,542.07. Korea's Kospi index gained 18.21 points, or 1.38%, to 1,338.28.
Treasuries weakened on follow-through selling after the solid February labor data released Friday, says S&P MarketScope. Prices for 10-year Treasury notes closed lower at 97-28/32 with a yield of 4.77%, while 30-year bonds fell to 95-26/32 for a yield of 4.76%, amid speculation of interest-rate hikes globally and mixed remarks from the San Francisco Fed chief.