Markets & Finance

Stocks End Mixed


Microsoft renewed negotiations with Yahoo. Oil hit another high, and an index of economic indicators rose 0.1%

Stocks ended mixed Monday amid mediocre economic news and reports that Microsoft (MSFT) has renewed negotiations with Yahoo (YHOO).

Microsoft offered and then withdrew a buyout offer for Yahoo, but this time it's talking about an alternative deal -- a transaction with Yahoo but not an outright acquisition of the whole company.

Oil prices continued to move higher On the NYMEX, crude oil for June delivery gained $1.05 to $127.34 per barrel. There is speculation oil demand may be increased further by the Chinese earthquake, which has damaged hydroelectric plants and roads, as well as preparation for the Beijing Olympics, Action Economics says.

On Monday, the Dow Jones industrial average gained 41.36 points, or 0.32%, to 13,028.16. The broader S&P 500 index added 1.28 points, or 0.09%, to 1,426.63. The tech-heavy Nasdaq composite index lost 12.76 points, or 0.5%, to 2,516.09.

On the New York Stock Exchange, 16 stocks lost ground for every 15 in positive territory. On the Nasdaq, the ratio was 17 to 12 negative.

The U.S. index of leading economic indicators edged up 0.1% in April, following a 0.1% increase in March. That mostly met economists' expectations.

Recent trends are encouraging but don't signal an imminent recovery, says Aaron Smith of Moody's Economy.com. "The index is consistent with an expansion that has stalled, and it supports the view that contraction this year will be mild," Smith said. "This indicator, along with the rest of the recent data flow, has lowered the risk of a sudden collapse in economic activity."

A research report from Deutsche Bank's (DB) Monday said that credit markets have made "considerable progress" returing to "more normal conditions since March." However, "we find it too early to give the 'all-clear signal' and expect central banks to stay on the alert," analyst Peter Hooper wrote.

Among stocks in the news Monday, the CME Group (CME) says it finished combining the trading floors of the Chicago Mercantile Exchange and the Chicago Board of Trade, which CME acquired last year. The firm says it's on the way to $150 million in savings from the merger.

Lowe's (LOW) reported earnings of 41 cents per share, an 18% decline from a year ago, as sales at the home improvement chain dropped from $12.2 billion to $12 billion.

Electronic Arts (ERTS) extended its offer for Take-Two Interactive (TTWO), the publisher of the Grand Theft Auto video games, by one month to June 16.

Lowe's Companies (LOW) reported earnings of 41 cents per share, vs. 48 cents a year ago, as same-store sales fell 8.4% and total sales dropped 1.3%. The firm cited a weaker economic outlook as a reason for the profit drop, and says it expects sales to fall 6 to 8% this quarter.

Dell Inc. (DELL) says its chief financial officer, Don Carty, will resign and be replaced by Brian Gladden.

Pinnacle Gas Resources (PINN) says it will not be acquired by Quest Resources (QRCP). Either party had the right to terminate the proposed merger if it wasn't completed by May 16.

Campbell Soup (CPB) posted earnings of 43 cents, vs. 45 cents a year ago, as revenue rose 7.4%.

Devry (DV) says the U.S. Justice Department asked the firm for documents related to its recruiter policies and practices.

Major European indexes were mostly higher Monday. In London, the FTSE 100 index rose 1.15% to 6,376.50. Paris' CAC 40 index added 1.26% to 5,142.10, and Germany's DAX index rose 0.97% to 7,225.94.

In Asia, Japan's Nikkei 225 was up 0.35% to 14,269.61, while Hong Kong's Hang Seng index gained 0.48% to 25,742.23.

Treasury market

Treasuries fell early in the day and then recovered later. The ten-year note was up 06/32 at 100-14/32 for a yield of 3.82%, while the 30-year bond rose 04/32 at 96-28/32 for a yield of 4.57%.

Steverman is a reporter for BusinessWeek's Investing channel.

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