S&P; Dips but Nasdaq, Dow Edge Higher
Wall Street took a breather Monday after three weeks of strong gains.
In other trading, the battered dollar strengthened slightly against the euro and other key currencies.
Major stock market barometers were mixed, despite a flurry of merger activity and another drop in crude oil prices.
But the buying was enough to push two key indexes of smaller stocks to record highs. And more stocks rose than fell on the New York Stock Exchange and on Nasdaq.
The blue-chip Dow Jones industrial average added 11.23 points, or 0.1%, to an eight-month high of 10,550.24 after trading in a narrow range all day.
The Nasdaq composite gained 8.75 points, or 0.4%, to 2,094.09, its best level since Jan. 27. The tech-heavy index is nearing its two-year closing high of 2,153.83 set on Jan. 26.
The Standard & Poor’s 500 index ended fractionally lower, off 0.36 point to 1,183.81. It hit a three-year high Friday.
Many Wall Street players appeared to be taking a break on Monday, analysts said. Stocks began to rally in late October, then zoomed after President Bush was reelected Nov. 2.
“We have had a move higher and people are maybe thinking it’s time for a respite,” Brian Williamson, head of equity trading at Boston Co. Asset Management, told Bloomberg News.
Still, the continuing slide in oil prices is helping to support the stock market’s bullish new tone, experts said.
Near-term crude futures in New York dropped 45 cents to $46.87 a barrel, the eighth decline in 11 sessions. A rebound in U.S. crude inventories has popped oil’s bubble in recent weeks.
Smaller stocks, which have led the market’s latest advance, outpaced blue chips again. An S&P; index of 600 smaller issues added 0.55 point, or 0.2%, to a record 316.24. The Russell 2,000 small-stock index was up 1.88 points, or 0.3%, to a record 623.86.
Year to date, the S&P; 600 is up 16.9% and the Russell index is up 12% while the Dow is up 0.9%.
In currency markets, the euro eased to $1.294 from a record $1.298 on Friday. The euro and other major currencies have been soaring against the dollar in recent weeks, in part reflecting traders’ concerns that foreign investors might balk at buying dollar-denominated assets unless the United States tames its massive budget and trade deficits.
One clue to overseas demand for U.S. assets will come today, when the Treasury reports on foreigners’ net buying or selling of U.S. stocks and bonds in September.
In the bond market, yields rose modestly Monday. The 10-year T-note ended at 4.19%, up from 4.18% on Friday. Many bond traders were awaiting today’s government report on October wholesale inflation.
Among Monday’s market highlights:
* Merger news lifted a number of stocks. Wm. Wrigley Jr. added 72 cents to $68.08 after the gum maker said it would buy several brands, including Life Savers and Altoids, from Kraft for $1.48 billion. Kraft slipped 20 cents to $34.68.
MarketWatch surged $1.33 to $18.12 after Dow Jones said it would buy the online news firm.
* William Lyon Homes jumped $14.62, or 22%, to $80.22, after the Newport Beach-based homebuilder on Friday said it sharply boosted its stock repurchase program.
Another Southland issue, biotech giant Amgen, slipped 5 cents to $59.92. But after the market closed the company said it raised $2 billion selling five- and 10-year notes. Wall Street had expected Amgen to raise $1.5 billion. The company said it would use the proceeds in part to buy back stock.
* Real estate investment trust shares continued their recent rally. A Bloomberg index of 152 REIT shares rose 1.76 points, or nearly 1%, to a record 187.29. The index is up 21.6% this year.
* Energy-related stocks were broadly lower as oil prices fell. Exxon Mobil lost 84 cents to $49.58, Noble Energy fell $1.82 to $58.60, and Hydril sank $2.76 to $41.08.
* SuperGen surged 55 cents, or 9.4%, to $6.43 after the pharmaceutical company won Food and Drug Administration approval for a generic equivalent of Bristol-Myers Squibb’s Taxol cancer drug. Bristol-Myers was off 5 cents to $24.31.
* Microsoft rose 42 cents to $27.39, after adjusting for the stock’s “ex-dividend” status. Friday was the last day investors could buy the stock and be eligible to receive the $3-a-share special dividend the software leader plans to pay on Dec. 2.