<font color=blue> MARKET SNAPSHOT--Choppy trading session on Street
By Rex Nutting, CBS MarketWatch
Last Update: 12:14 PM ET Sep 11, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) -- U.S. stocks were whipped back and forth in a choppy trading session Monday.
The Dow reversed earlier losses, but the Nasdaq couldn't make up its mind whether to rally or retreat.
Crude oil put a damper on stocks after the market reacted with pessimism to the Organization of Petroleum Exporting Countries announcement of an 800,000-barrel a day production increase.
Oil service stocks, integrated oils and utilities were all higher Monday. Technology shares were helping the Nasdaq. Financials boosted the Dow.
In recent trades the Dow ($INDU: news, msgs) rose 52 points to 11,272. The Nasdaq ($COMPQ: news, msgs) fell 12 points to 3,966. The S&P 500 index ($SPX: news, msgs) rose 5 points to 1,499.
On the New York Stock Exchange, advancers led decliners by a 3 to 2 margin. Volume was 434 million shares at noon Eastern. On the Nasdaq, decliners were ahead of advancers by a 5 to 4 margin. Volume was 699 million.
There were several mergers and acquisitions announced Monday, including another financial sector deal for Goldman Sachs.
Goldman said it is buying market maker Spear, Leeds & Kellogg for $6.5 billion in cash and stock, capping a sizzling summer of financial industry mega-mergers. The deal would expand its retail operations and boost it trading of Nasdaq stocks.
Goldman (GS: news, msgs) shares posted a robust $6 per share gain to $130.25 on its plans to buy Spear, Leeds & Kellogg for $10 billion. The financial sector rallied on the move. See full story.
Shares of Hewlett-Packard (HWP: news, msgs) fell along with most of the broader technology sector after the computer giant confirmed plans to buy PricewaterhouseCoopers' consulting business for about $17.5 billion. See full story.
Meanwhile, the oil sector benefited from the negative reaction to the OPEC meeting. Shares of integrated oil and oil service companies were strong as crude oil prices rose. The AMEX oil index was up 2.7 percent and the CBOE oil index ($OIX: news, msgs) rose 2.8 percent. The Philadelphia Exchange's Oil Services index ($OSX: news, msgs) rose 4.6 percent.
The Organization of Petroleum Exporting Countries said Sunday that it would increase total daily output from 10 members, excluding Iraq, by about 3 percent to 26.2 million barrels a day. See full story.
Crude futures rose sharply early Monday amid concerns that OPEC's three-percent production hike only legitimizes the cartel's current overproduction and won't be enough to build inadequate U.S. supplies.
Utility shares rose. The Dow Jones Utility Average ($UTIL: news, msgs) gained 2.5 percent to 395.87.
On the New York Mercantile Exchange, October crude rose $1.69 to $35.35 a barrel. October heating oil climbed 5.61 cents to $105.10 a gallon.
In company news, Dura Pharmaceuticals (DURA: news, msgs) jumped Monday after Elan Corp announced it had entered into an agreement to buy the company in a transaction valued at $1.8 billion.
Under terms of the deal, Dura shareholders will receive 0.6715 of Ireland-based Elan's ADSs for each Dura share they own. Based on Friday's closing price, the offer, at approximately $35.01 per share, represents a 22 percent premium. Dura said its board has unanimously accepted the merger, and is recommending shareholders to do the same.
Cyberonics (CYBX: news, msgs) powered up $9.06 to $25.13. Medtronic (MDT: news, msgs) confirmed that it has made a proposal to buy the company for $26 a share in stock. That represents a 62 percent premium over Cyberonics's closing price on Friday, and $2.25 below its 52-week high. Medtronic said it made its proposal in a letter dated July 17 to Robert Cummins, Cyberonics' chief executive. A letter to the company's board was sent on Aug. 9.
Medtronic shares fell 38 cents to $51.31.
Earnings and data watch
This week's does of economic news will come in the form of the retail sales report for August, industrial production and capacity utilization as well as those closely-watched inflation indicators: the producer and consumer price indexes.
The figures presented during the past couple of months have painted a uniform picture of the economic landscape: that of growth that's tapering off to a more sustainable, non-inflationary pace. The market's perception that the Federal Reserve can afford to stay on hold for the remainder of the year needs to be confirmed by this next batch of numbers.
This week's limited dose of earnings news includes reports from Solectron, Value City Dept. Stores, Best Buy, Pier 1 Imports, Kroger, Biomet, Oracle, Adobe Systems, Red Hat, Verity, Nike, Dress Barn and General Mills.
First Call notes that a greater amount of large companies have been reporting negative pre-announcements for the third quarter. However, the earnings compiler said there's still no clear indication that these downward revisions will turn out to be more than normal once the pre-announcement period concludes.
First Call said estimated earnings growth for S&P 500 companies in the third-quarter currently stands at 17.1 percent, down from the 18.8 percent expected on July 1.
Treasury focus
Treasurys started the week in the red, as the inflation-sensitive fixed-income market snubbed the smaller-than-expected crude production pledge from OPEC.
An upcoming influx of new corporate debt was also keeping the government sector on the defensive
A benchmark 10-year Treasury note was off 5/32 at 99 27/32, yielding 5.76 percent, while the 30-year bond shaved 9/32 to 107 16/32 and was yielding 5.72 percent.
A 5-year note lost 5/32 at 103 4/32 to yield 5.97 percent and a 2-year note eased 2/32 at 99 31/32 and was yielding 6.13 percent. See full story.
Greg Morcroft and Julie Rannazzisi contributed to this report. |
