Major indexes finished narrowly mixed Monday, with blue-chips pulling back from nearly five-year highs despite a sharp decline in oil prices. Gains were limited by caution ahead of a speech by Federal Reserve Chairman Ben Bernanke, says Standard & Poor's MarketScope.
The Dow Jones industrial average edged lower 5.12 points, or 0.05%, to 11,274.53, supported by gains from Microsoft (MSFT) and Wal-Mart (WMT). The broader Standard & Poor's 500 index slipped 2.17 points, or 0.17%, to 1,305.8. The tech-heavy Nasdaq composite index gained 7.63 points, or 0.33%, to 2,314.11.
The economy may slow down over the rest of the year, some analysts say. "We expect real GDP growth of 3.7% for 2006, with the first quarter being the strongest, followed by a gradual deceleration over the remaining quarters," says Bob Hughes, an economist with Prudential Equity.
Interest rates remained in focus Monday, after hopes for fewer rate hikes helped spur a rally last week. Bernanke may shed more light on the subject in remarks Monday night at the Economics Club of New York.
On Monday's economic docket, the February leading economic indicators index fell 0.2%, slightly weaker than expected, says Action Economics.
On Tuesday, the overall producer price index is expected to decline 0.4%, while the core index rises 0.2%.
Of blue-chips in focus Monday, General Motors (GM) ended lower in a choppy session. Former GM unit Delphi said it would delay filing its year-end financial statement until it completes talks with the automaker and the United Auto Workers union.
Tech bellwether Google (GOOG) was higher on the heels of a federal judge's ruling Friday that the Internet search giant doesn't have to turn over search queries to the government. The company does have to surrender 50,000 Web addresses, the judge ruled.
Computer maker Dell (DELL) climbed after Chairman Michael Dell said the company plans to double its workforce in India to 20,000 employees. Competitor Hewlett-Packard (HPQ) fell modestly.
Meanwhile, Apple (AAPL) was lower after reports the company will launch its own brand of cellular phone. Wireless phone maker Motorola (MOT) was also lower.
On the earnings front, software maker Oracle (ORCL) posted 42% profit for its fiscal third-quarter on 18% higher revenue. Excluding items, its earnings of 19 cents a share, up from 16 cents, topped some estimates.
Investors were also digesting M&A activity. Pfizer (PFE) reportedly may receive a possible $10.5 billion bid for its consumer products division from British company Reckitt Benckiser PLC. Colgate-Palmolive (CL) has also expressed strong interest in the business.
British insurer Prudential (PUK) surged after the reiterated its rejection of a bid from rival Aviva, which said it has no plans to increase its offer.
Crafts retailer Michael's Stores (MIK) was sharply higher on reports it is considering alternatives, including a sale of the company.
In broker calls, Monster.com parent Monster Worldwide (MNST) was lower after Bank of America cut the stock from buy to neutral. The bank also upgraded pharmaceuticals group Schering Plough (SGP) from sell to neutral.
Among other companies in the news, Sirius Satellite Radio (SIRI) said it recently passed 4 million subscribers worldwide. Bear Stearns reiterated a rating of outperform on the stock.
In the energy markets Monday, April West Texas Intermediate crude oil futures closed down $2.35 at $60.42 a barrel, as ample supply expectations offset geopolitical concerns.
European markets finished mixed. In London, the Financial Times-Stock Exchange 100 index fell 7.7 points, or 0.13%, to 5,991.7. Germany's DAX index rose 20.41 points, or 0.35%, to 5,902.79. In Paris, the CAC 40 index slipped 2.57 points, or 0.05%, to 5,138.51.
Asian markets finished higher. Japan's Nikkei 225 index rose 285.07 points, or 1.74%, to 16,624.8. In Hong Kong, the Hang Seng index climbed 128.29 points, or 0.81%, to 15,929.95. Korea's Kospi index added 5.57 points, or 0.42%, to 1,346.69.
Prices for 10-year Treasury notes were closed higher at 98-25/32 with a yield of 4.66%, while 30-year bonds rose to 96-29/32 for a yield of 4.7%. Yields were kept down by hopes Bernanke might hint at an end to the Fed's tightening cycle, says Action Economics.