Stocks finished mostly lower Monday, continuing Friday's weakness as markets focused on first-quarter earnings season. Treasury yields near multi-year highs and higher oil prices created an inflationary scenario, hampering equities, says Standard & Poor's MarketScope.
The Dow Jones industrial average rose 21.29 points, or 0.19%, to 11,141.33, paced by Boeing (BA). The broader Standard & Poor's 500 index inched higher 1.12 points, or 0.09%, to 1,296.59. The tech-heavy Nasdaq composite fell 5.75 points, or 0.25%, to 2,333.27.
Worries about higher interest rates may be overdone, some analysts say. "Strong growth and modest inflation has been in place for most of the last 10 years," writes Tobias Levkovich, chief U.S. equity strategist at Citigroup. "Given increased outsourcing, improved productivity, and subdued labor pressure, we suspect that the end of 'Goldilocks' may not be that near."
Investors were turning their attention to earnings reports Monday. After the closing bell, aluminum giant Alcoa (AA) posted first-quarter profit of 69 cents per share, up from 30 cents per share, beating analyst estimates. Chipmaker Advanced Micro Devices (AMD), newspaper publisher Gannett (GCI), industrial giant General Electric (GE) and drugmaker Genentech (DNA) are up later in the week.
M&A activity may also draw attention. Financial company J.P. Morgan Chase (JPM) was higher in afternoon trading after reaching a deal to acquire Bank of New York's (BK) retail businesses. In exchange, J.P. Morgan will hand the bank its corporate trust business and $150 million.
Meanwhile, electronic payment systems maker Verifone Holdings (PAY) said it would acquire rival Lipman Electronic Engineering (LPMA) in a $793 million deal.
Outside of deal news, Disney (DIS) was higher on news the company would begin offering four television shows, including "Desperate Housewives" and "Lost," for free over the Internet.
Retailer Wal-Mart (WMT) was lower amid reports of opposition to the company's planned expansion into banking.
Broker calls were also in the picture. Defense contractor Raytheon (RTN) was lower after Merrill Lynch trimmed its rating on the stock from buy to neutral. Video-rental behemoth Blockbuster (BBI) was sharply higher after Citigroup upgraded the stock from hold to buy.
In the energy markets Monday, May West Texas Intermediate crude oil futures closed up $1.35 at $68.74 a barrel, amid reports of possible military action in response to Iran's nuclear ambitions.
European markets finished higher. In London, the Financial Times-Stock Exchange 100 index rose 40.9 points, or 0.68%, to 6,067. Germany's DAX index climbed 50.48 points, or 0.85%, to 6,003.4. In Paris, the CAC 40 index was up 15.31 points, or 0.3%, to 5,190.27.
Asian markets finished mixed. Japan's Nikkei 225 index fell 106.79 points, or 0.61%, to 17,456.58. In Hong Kong, the Hang Seng index rose 49.81 points, or 0.3%, to 16,521.59. Korea's Kospi index slipped 4.07 points, or 0.29%, to 1,398.29.
Treasury yields pulled back slightly from near-four-year highs, says Action Economics. Prices for 10-year Treasury notes were modestly higher at 96-14/32 with a yield of 4.96%, while 30-year bonds rose to 91-23/32 for a yield of 5.04%.