Stocks end mixed on a slow trading day; consumer companies lead
Stocks got a little help Monday from an international hotel deal and dueling superheroes, but they could only wobble to a split finish in a quiet day of trading.
Hotel chains Starwood and Marriott climbed after a group led by a Chinese insurance company made another offer to buy Starwood. Media giant Time Warner rose after “Batman v Superman: Dawn of Justice” had a super opening weekend.
Stocks flipped between small gains and losses for most of the day. Oil prices slipped and energy companies took modest losses. Mining and metals companies traded slightly higher.
Monday was the slowest trading day of 2016 for U.S. markets, and European exchanges were closed for the Easter holiday. Trading was closed in the U.S. on Friday for the Good Friday holiday.
The Dow Jones industrial average rose 19.66 points, or 0.1%, to 17,535.39. The Standard & Poor’s 500 index edged up 1.11 points to 2,037.05, ending a three-day losing streak. The Nasdaq composite index slipped 6.72 points, or 0.1%, to 4,766.79.
Stocks have flagged in the last few days after a five-week rally.
The bidding for Starwood may have reached an end as a group of investors led by China’s Anbang Insurance Group offered to buy the company for $15 billion. Marriott agreed to buy Starwood for $12.2 billion last year and recently raised that offer to $14.41 billion. Starwood stock climbed 2% Monday to $83.75. It’s up 19% in the last two weeks.
Marriott rose 3.9% to $71.34 on Monday. JMP Securities analyst Whitney Stevenson said investors expect Marriott to give up on its pursuit of Starwood.
“They were probably at the limit of what they wanted to pay,” she said. “Marriott stock is up today because the market is assuming they do not overpay and collect the $470-ish million they get from the breakup fee and walk away from this thing.”
If Anbang does buy Starwood, that will be good news for smaller hotel companies, Stevenson said. Starwood and Marriott combined would have been the largest hotel company in the world, and she said they could have “crushed” smaller competitors.
Time Warner climbed after “Batman v Superman” had one of the best opening weekends ever despite negative reviews and some skepticism from fans. It grossed about $424 million worldwide, including $170 million in the U.S. That was a good sign for Time Warner’s planned series of movies based on DC Comics characters.
Time Warner rose 3.6% to $72.54.
Also making gains were Netflix, which rose 2.9% to $101.21, and retailer Dollar Tree, which went up 3% to $80.84.
Those and other consumer stocks rose after the government said Friday that the U.S. economy grew at a faster pace in the fourth quarter. And on Monday, the Commerce Department said consumer spending continued to grow in February, although for the third straight month, it rose only a small amount.
Consumers have saved a lot of money as gas and heating prices have plunged, said Michael Scanlon, managing director and portfolio manager for John Hancock Asset Management. But he said people aren’t sure that prices will stay low, so they haven’t ramped up their spending. That has surprised experts.
“The fact that spending is growing in line with wages is showing how much more responsible the U.S. consumer is today,” he said. But Scanlon thinks consumers will start spending more soon.
On Friday the government said the economy grew 1.4% in the fourth quarter, above its previous estimate of 1%. Consumer spending and home construction kept the economy growing.
Benchmark U.S. crude fell seven cents to $39.39 a barrel in New York. Brent crude, used to price international oils, fell 17 cents to $40.27 a barrel in London. That weighed on energy companies. Hess fell 2.4% to $50.84, and Devon Energy sank 63 cents to $25.84.
Noble Energy slumped after Israel’s Supreme Court struck down a deal that would have given Noble and other companies the right to start pumping natural gas from offshore deposits. The stock shed 8.2% to $29.69.
Cosmetics giant Avon Products said it reached a deal with activist investors, including Barington Capital, that headed off a possible proxy fight. Avon stock rose or 8.4% to $4.64.
Pandora Media skidded after the streaming music company announced a management shakeup. Co-founder Tim Westergren will replace Brian McAndrews as chief executive. The stock tumbled 12.2% to $9.60.
In other energy trading, wholesale gasoline was little changed at $1.47 a gallon. Heating oil fell 2 cents to $1.18 a gallon. Natural gas rose 4 cents, or 2.3%, to $1.85 per 1,000 cubic feet.
The price of gold fell $1.50 to $1,220.10 an ounce. Silver slipped 1 cent to $15.19 an ounce. Copper rose 2 cents to $2.25 a pound.
Asian stocks were mostly lower. Seoul’s Kospi edged down 0.1%. Tokyo’s Nikkei 225 gained 0.8%.
Bond prices rose. The yield on the 10-year U.S. Treasury note slipped to 1.88%, from 1.91%. The euro inched up to $1.1200, from $1.1177, late Thursday. The dollar rose to 113.28 yen from 112.81 yen.
