Markets End Mixed as Yields Slip
Stocks closed mixed in a relatively quiet session Monday, after Friday’s surge.
Treasury bond yields continued to ease on the latest signs the economy is slowing.
On Wall Street, the Nasdaq composite gained 8.38 points to 3,821.76 after rocketing nearly 231 points Friday, when the government’s report of a weakening employment picture for May sent bond yields tumbling and stocks soaring.
Though some traders were disappointed Nasdaq couldn’t rally further, others noted that several bouts of profit-taking through the day had pushed the index to a net loss, only to draw more buyers in.
The Dow industrials gained 20.54 points to 10,815.30, after rising 142 points Friday.
Losers had a 16-13 edge on the New York Stock Exchange, but on Nasdaq winners topped losers by 22 to 18. Nasdaq volume slowed to 1.45 billion shares from 1.9 billion on Friday.
All things considered, “The market’s doing extremely well,” said Edward Yardeni, chief economist at Deutsche Bank Securities.
In the bond market, Treasury yields slipped to fresh six-week lows on growing expectations the Federal Reserve might be nearing the end of its credit-tightening campaign.
The National Assn. of Purchasing Management said Monday that non-manufacturing activity slowed in May because of fewer domestic orders. Also, the NAPM’s prices-paid index eased back to 65.5 in May from 71.0, the second monthly decline, suggesting easing pricing pressures.
The 10-year T-note yield fell to 6.12% from 6.17% Friday. The yield was at 6.54% in mid-May.
The 2-year T-note eased to 6.49% from 6.53%.
Dallas Federal Reserve President Robert McTeer said Monday that there’s little question that the Fed’s six interest rate increases in the last year are having the desired effect. But he cautioned against placing too much stock in a few reports.
In foreign trading, the U.S. market rebound last week continued to help pump up many Asian markets. Also, Japan’s Nikkei-225 index rose 2.4% to 17,201, the fourth straight gain, on expectations a report Friday will show Japan’s economy grew in the January-March quarter.
Among Monday’s highlights:
* Biotech stocks shined, led by Genentech, up $20.94 to $130.06, after the firm’s new heart-attack drug was approved by the U.S. Food and Drug Administration.
Other gainers included Biogen, up $3.19 to $63.19; Cephalon, up $3.13 to $59.75; and Affymetrix, up $22.44 to $164.69.
* Major tech stocks were mixed. Intel fell $1.63 to $132.56 and Cisco Systems eased $1.13 to $63.25, while Adobe Systems jumped $3.69 to $128.69, Oracle added 75 cents to $80.94 and IBM rose $4 to $112.81.
* Qualcomm slumped $5.44 to $67.25. During the weekend, China United Telecommunications confirmed it won’t use a mobile phone technology designed by Qualcomm for at least three years. Speculation about the China contract had heightened volatility in Qualcomm shares in the last few sessions.
* Natural gas stocks pulled back after their recent powerful rally. Apache slid $1.13 to $54.88, Enron lost $3.50 to $66 and Nicor fell $1.81 to $34.94.
* Bank stocks also weakened after soaring Friday. Wells Fargo lost $2.63 to $45.13, US Bancorp slid $1.38 to $25.88 and Golden West Financial was down $2.44 to $43.56.
Market Roundup, C14-C15
