Stocks roiled by oil
Major gauges suffer losses as crude oil flirts with new all-time trading high.
April 4, 2005: 10:27 AM EDT
NEW YORK (CNN/Money) - Stock declines accelerated Monday morning, as record high crude prices overshadowed any positive corporate developments, including a $16.4 billion merger deal in the oil sector.
The Nasdaq composite (Research) lost 0.6 percent around 45 minutes into the session.
The Dow Jones industrial average (down 31.19 to 10,373.11, Charts) and the broader Standard & Poor's 500 (down 4.04 to 1,168.88, Charts) index both lost around 0.3 percent.
Stocks slumped Friday on rising oil prices and worries about inflationary signs in the economic news. Similar concerns weighed Monday in the early going.
Oil jumped to a new record trading high of $58.28 a barrel on the New York Mercantile Exchange before pulling back some to $57.90. On Friday, light crude oil for May delivery closed at $57.27 a barrel, a new closing high.
That overshadowed any enthusiasm over a multi-billion dollar deal in the oil sector.
ChevronTexaco said Monday that it will buy Unocal for in a cash and stock deal worth around $16.4 billion. However, the deal values Unocal stock at below where it closed Friday, and investors saw this as a disappointing premium, and sold Unocal (down $4.35 to $60.00, Research) stock.
Shares of ChevronTexaco (down $1.54 to $57.77, Research) lost around 1 percent.
Shares of Morgan Stanley (up $0.98 to $57.85, Research) jumped 3 percent after a British newspaper reported that UK-based HSBC Holdings was considering making an offer for the U.S. bank.
Shares of troubled insurer American International Group (down $0.38 to $50.57, Research) abandoned an early rally, turning negative, even after two brokerages upgraded its share.
Smith Barney Citigroup and Morgan Stanley both upgraded AIG, saying after its recent decline, the stock was a good value. The stock has been hit hard amid ongoing probes of its accounting by both the Securities and Exchange Commission and the New York Attorney General's office.
General Motors (down $0.02 to $29.36, Research) shares rose 7 cents to $29.45 after the No. 1 automaker announced a management shakeup, giving CEO Rick Wagoner responsibility for North American operations.
Market breadth was negative. On the New York Stock Exchange, decliners edged advancers two to one on volume of 275 million shares. On the Nasdaq, losers topped winners two to one on volume of 330 million shares.
Treasury prices rose, with the yield on the 10-year note slipping to 4.44 percent from 4.45 percent late Friday. Bond prices and yields move in opposite directions.
In currency trading, the dollar rose versus the euro and the yen.
COMEX gold fell $1 to trade at $427.30 an ounce.
In global trade, Asian-Pacific stocks ended mostly lower and European shares fell at midday.
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