A slurry of deals imparts momentum in market which starts day amid weak economic data
A slew of deals, including a $29 billion leveraged buyout of First Data weighed against a weak manufacturing report and higher oil prices but pushed stocks higher at the US Market going into close for the day. Stocks lingered throughout the day on Wall Street but ultimately rebounded off session lows. After climbing as high as $66.69/bbl earlier, oil prices closed relatively flat on the day near $66/bbl. Utilities was the day's best performer following a couple of analyst upgrades.
13 put of 30 stocks closed higher today. For the day (2 April, Monday) the Dow Jones Industrial Average closed higher by 27.95 points at 12382.3, Nasdaq higher by 0.62 points at 2422.26 and S&P 500 higher by 3.69 points at 1424.55. Altria, Exxon Mobil, IBM and Merck were the main Dow winners while American Express, Citigroup and Du-Pont were the main Dow laggards.
A slurry of deals tried to impart some momentum into the market. Kohlberg Kravis Roberts has offered to take First Data private for $29 bln while Chicago real estate magnate Sam Zell has won the bidding war for Tribune. Xerox buying Global Imaging Systems for $1.5 bln was the other news. The first deal deal pushed First Data up nearly 21% to $32.45, the best percentage gain on the S&P 500.
Health Care got a lift from Merck which won FDA approval for its diabetes drug Janumet. Among technology shares, Apple gained 0.7% after it reached a deal with EMI to make music available without antipiracy software. Major Dow winner, Altria surged 3.5% as shareholders applauded its spin off of Kraft Foods.
Weak ISM weighs on market; Alt-A Mortgage concerns attack market
The second quarter kicked off slowly after a discouraging ISM report. The ISM index fell to 50.9 (consensus 51.0) from 52.3 in February as inventories, employment and order backlogs were all below the 50 mark that defines contraction. The prices paid index rose to 65.5, the highest since August. Market reacted negatively and indices were mostly in the red for the first half of the day.
Sun Microsystems dragged on the technology sector. Software and Internet were the weakest sections of Nasdaq today.
The broader telecom sector was weighed down after Nokia-Siemens, a venture between Nokia and Siemens said there were signs of a slowing in equipment spending over the last few months, resulting in a downgrade of its 2007 industry-wide spending forecast.
M&T Bank lowered its Q1 guidance citing weakness in the secondary market for Alt-A loans and this once again showed signs of housing problems in the economy and acted as an overhang all day. Investors were also worried with some commentary from St. Louis Fed President William Poole who said the Fed isn't likely to cut interest rates even as the economy slows.
Trading volumes showed 1.5 billion shares changing hands on the New York Stock Exchange and 1.75 billion trading on the Nasdaq stock market. Advancing issues topped decliners by 17 to 12 on the NYSE, while decliners led gainers by 15 to 12 on the Nasdaq.
March Auto Sales and March Truck Sales are the only major economic data on the schedule for tomorrow.