Stocks finished mixed Monday, as a morning rally on bustling deal news fizzled amid disappointing vehicle sales reports. Fresh fund inflows at the start of the second quarter likely provided a boost says Standard & Poor's MarketScope.
The Dow Jones industrial average rose 35.62 points, or 0.32%, to 11,144.94, paced by Caterpillar (CAT) and Hewlett-Packard (HPQ). The broader Standard & Poor's 500 index added 2.99 points, or 0.23%, to 1,297.81. The tech-heavy Nasdaq composite slipped 3.05 points, or 0.13%, to 2,336.74.
A clutch of M&A activity kicked off the second quarter Monday. French broadband equipment maker Alcatel (ALA) agreed to acquire U.S. telecommunications equipment maker Lucent (LU) for $13.4 billion. Shares in both companies were higher in midsession trading.
Also in telecom, Verizon (VZ) agreed to sell its operations in the Dominican Republic, Puerto Rico and Venezuela for $3.7 billion to America Movil and Telefonos de Mexico. Verizon shares were higher.
Automaker General Motors (GM) was lower after agreeing to sell control of its financing unit, General Motors Acceptance Corp., to a group led by Cerberus Capital Management for about $14 billion.
Meanwhile, Ameristar Casinos (ASCA) was lower after making a $2.3 billion bid for casino operator Aztar (AZR), which was trading higher on the news.
Outside of deal news, March vehicle sales fell below expectations. Ford (F) reported an expected 4.4% decline in sales from last March, and shares declined. General Motors (GM) posted a much weaker-than-expected drop of 14.4%. Meanwhile, Daimler-Chrysler (DCX) gained on an unexpected 2.9% sales increase, and Toyota (TM) advanced on a 7% sales increase.
Elsewhere, Microsoft (MSFT) rose on a positive report about the software giant's delayed Windows Vista operating system.
On the downside, Wal-Mart (WMT) was lower after the retail giant said it expects its March same-store sales to increase 1.3%, at the low end of previous guidance. Sirius Satellite Radio (SIRI) was lower despite reports the satellite radio provider will have positive cash flow when it reaches $1 billion in revenue in 2007.
In economic data, the Institute of Supply Management's index for March fell unexpectedly to 55.2, after February's reading of 56.7, says Action Economics. Separately, February construction spending rose 0.8%, better than projected.
Also on the economic front, pending home sales fell 0.8% in February to a 117.7 index reading. The numbers point to additional slowing in the housing market, though an upward revision of January's increase to 0.9% lessens the decline, says Action Economics.
The economic calendar is light Tuesday, followed on Wednesday by the ISM report on the services industry for March. Thursday brings the weekly jobless claims report.
In the energy markets Monday, May West Texas Intermediate crude oil futures closed up 11 cents at $66.74 a barrel amid geopolitical concerns. Energy companies like Exxon Mobil (XOM) were modestly higher.
European markets finished higher. In London, the Financial Times-Stock Exchange 100 index rose 59.7 points, or 1%, to 6,024.3. Germany's DAX index added 53.97 points, or 0.9%, to 6,024.05. In Paris, the CAC 40 index was up 34.41 points, or 0.66%, to 5,255.26.
Asian markets finished higher. Japan's Nikkei 225 index rose 273.65 points, or 1.6%, to 17,333.31. In Hong Kong, the Hang Seng index climbed 258.71 points, or 1.64%, to 16,063.75. Korea's Kospi index gained 20.15 points, or 1.48%, to 1,379.75.
Treasuries declined, as the recent bearish bias weathered a decline in March manufacturing data and the pending home sales index, says S&P MarketScope. Prices for 10-year Treasury notes closed lower at 97-03/32 with a yield of 4.87%, while 30-year bonds fell to 93-23/32 for a yield of 4.9%.