Stocks finished narrowly mixed Monday, consolidating Friday's gains after a spurt of M&A news. Attention was shifting toward the Federal Reserve's policy statement Wednesday, falling oil prices and geopolitical developments, as the first-quarter earnings season nears an end, says Standard & Poor's Equity Research.
The Dow Jones industrial average rose 6.8 points, or 0.06%, to 11,584.54, paced by Alcoa (AA), General Motors (GM), and Intel (INTC). The broader Standard & Poor's 500 index edged down 1.1 points, or 0.08%, to 1,324.66. The tech-heavy Nasdaq composite added 2.42 points, or 0.1%, to 2,344.99.
The Fed may pause its interest-rate hikes at 5%, some analysts say. "Markets fear the Fed is falling behind the curve on inflation," says Jan Hatzius, chief economist at Goldman Sachs. "Upcoming reports are apt to feed these fears, as not much is required between now and midyear to push core consumer inflation above Chairman Bernanke's 1%-2% comfort zone."
M&A activity was in focus Monday. Wachovia (WB) was lower after agreeing to buy Golden West Financial (GDW) for about $26 billion, as the bank expands into the western U.S.
Scientific supply company Thermo Electron (TMO) agreed to buy rival Fisher Scientific International (FSH) in a $10.6 billion all-stock deal.
Meanwhile, Warner Music Group (WMG), which recently rejected a takeover offer from EMI (EMI.LN), was lower after Citigroup downgraded the stock from hold to sell.
Elsewhere, Warren Buffett's holding company Berkshire Hathaway (BRKA) struck a $4 billion deal to buy 80% of Israeli tool maker Iscar.
Among other companies in focus, Apple (AAPL) may use its logo on its iTunes music software, a judge ruled, rebuffing a lawsuit by the Beatles' Apple Corps Ltd.
The economic docket was light Monday, but markets are set for a full calendar later in the week. On Tuesday, March wholesale sales are expected to rise 0.6%, while inventories rise 0.7%, says Action Economics.
In the energy markets Monday, June West Texas Intermediate crude oil futures closed down 42 cents at $69.77 a barrel.
European markets finished mixed. In London, the Financial Times-Stock Exchange 100 index fell 24.6 points, or 0.4%, to 6,067.1. Germany's DAX index rose 14.69 points, or 0.24%, to 6,127.98. In Paris, the CAC 40 index slipped 4 points, or 0.08%, to 5,282.4.
Asian markets finished higher. Japan's Nikkei 225 index rose 137.9 points, or 0.8%, to 17,291.67. In Hong Kong, the Hang Seng index rallied 287.86 points, or 1.69%, to 17,301.79. Korea's Kospi index gained 11.21 points, or 0.78%, to 1,452.23.
Prices for 10-year Treasury notes edged lower to 95-09/32 with a yield of 5.12%, while 30-year bonds held steady at 89-20/32 for a yield of 5.19%.