Still Struggling, Stocks End Mixed
Wall Street struggled Monday amid continued weakness in the drug and technology sectors.
Oil prices eased, and the dollar slumped against the euro.
Blue-chip indexes finished slightly higher, helped by gains in industrial, energy and utility shares. The Dow Jones industrial average edged up 11.68 points, or 0.1%, to 10,661.60.
The Standard & Poor’s 500 index added 0.45 point, or less than 0.1%, to 1,194.65.
But the technology-dominated Nasdaq composite index fell for a third straight session, losing 7.35 points, or 0.3%, to 2,127.85.
Declining stocks had a slight edge over winners on the New York Stock Exchange; on Nasdaq, losers led by 3 to 2.
Stocks ended broadly lower Friday, led by the drug sector, after Pfizer and Eli Lilly separately warned of potential complications from two of their drugs. Also, AstraZeneca said an anti-cancer drug didn’t appear to help patients live longer.
The drug sector continued to slide Monday. Pfizer, which sank $3.23 on Friday, lost $1.46 to $24.29. Lilly, which fell $1.38 on Friday, gave up 72 cents to $55.30. Most other major drug stocks also declined.
But AstraZeneca added 19 cents to $37.29 after tumbling $3.11 on Friday.
The market on Friday also was buffeted by trading related to the quarterly expiration of options and futures contracts on key stock indexes. That had caused trading volume to balloon and put downward pressure on some shares, analysts said.
Monday’s session saw “a little bounce from the selling we saw on Friday,” said Chris Johnson, an analyst at Schaeffer’s Investment Research in Cincinnati. “Certainly Pfizer rattled some cages, and we had some of that knee-jerk selling across the board. Today they’re coming back.”
The market got a boost early in the day after the Conference Board said its index of leading economic indicators rose in November. The Dow was up as much as 86 points before falling back. Nasdaq also started the day in positive territory but couldn’t hold on.
The tech sector is suffering from a bout of profit taking after Nasdaq last week hit a three-year high, some analysts said.
Also, software firm Symantec’s $13.5-billion agreement last week to buy Veritas Software has been poorly received by Wall Street. That has hurt the software sector.
Symantec fell $1.33 to $24.04 on Monday, its fourth loss in five sessions. Veritas dropped $1.30 to $26.45.
By contrast, a merger in the utility sector was welcomed by investors Monday. Chicago-based Exelon said it would buy Public Service Enterprise Group of New Jersey in a $12-billion deal.
Exelon jumped $1.19 to $43.05, and Public Service Enterprise surged $3.29 to $50.56.
The Dow utility stock index rose 4.12 points, or 1.3%, to 333.21, nearing the three-year closing high of 333.58 reached Nov. 26.
If consumers’ last-minute holiday spending is decent, the stock market could use that as an excuse to extend this year’s advance, some analysts said.
“There is positive momentum that could carry into January as long as retail sales come out strong,” said Jeffrey Davis, chief investment officer at money manager Rockefeller & Co.
A pullback in oil prices also could help. Near-term crude futures in New York gave up 64 cents to $45.64 a barrel Monday after jumping $2.10 on Friday amid concerns about lower temperatures in the Eastern U.S.
Weather concerns lessened somewhat Monday, analysts said.
In other trading, the dollar resumed its decline. The euro rallied to $1.34 from $1.329 on Friday. Some traders said negative sentiment toward the dollar could push the euro to a record $1.36 before trading ends this year.
“The dollar deserves to fall; the U.S administration is not going to stand in its way,” said Steve Barrow, a currency strategist at brokerage firm Bear Stearns Cos. in London.
In the bond market, short-term Treasury yields were higher while long-term yields were little changed. The 10-year T-note ended at 4.19%, down from 4.20% on Friday.
Among Monday’s market highlights:
* Some industrial and commodity-related stocks added to their 2004 gains. Potash soared $1.91 to $82.76, W.W. Grainger jumped $1.41 to $65.40, and Textron was up 78 cents to $73.14.
* Among utilities, FirstEnergy rose 66 cents to $39.98 and TXU added 50 cents to $64.38.
* Software stocks losing ground included Ansys, down $1.15 to $30.05, and Check Point Software, down 50 cents to $24.25.
* Mortgage giant Fannie Mae slid 89 cents to $69.42 after its board met Sunday to discuss a possible shake-up of its executive team in the wake of severe accounting discrepancies.
* Ryder System tumbled $5.53 to $48.97. The largest commercial-truck leasing firm said it might owe $190 million in back taxes and would not meet analysts’ 2005 earnings estimates.
