 |
 |
|
|
| Old conundrum, new twist
|
| Inverted or flat, the yield curve points to a weaker Federal Reserve, not a downturn. (Full story)
|
|
|
|
|
|
|
|
| 'Me-too' drugs rake in sales
|
| Copycats like Lipitor can make billions, or fail like Vioxx and Bextra. (Full story)
|
|
|
|
NEW YORK (CNNMoney.com) -
Stocks ended lower for the third consecutive session Monday, reversing earlier advances as tech concerns and economic anxiety outweighed a big Pfizer patent victory and falling oil prices.
The Dow Jones industrial average (down 39.06 to 10,836.53, Charts) fell about 0.4 percent while S&P 500 (down 7.40 to 1,259.92, Charts) index lost about 0.6 percent, according to early tallies.
The Nasdaq composite (down 29.74 to 2,222.74, Charts) fell about 1.3 percent.
While the Nasdaq was down all day, the Dow and S&P had traded higher earlier in the session.
"It's somewhat disappointing to not see the market stronger on good corporate news and falling oil prices," said Peter Cardillo, chief market analyst at S.W. Bach & Co. "It's lacking a catalyst."
Cardillo said that catalyst could come later this week in the form of several economic reports, including a final reading on gross domestic product and consumer sentiment.
Investors will be watching for the Producer Price index, a measure of inflation, and numbers on housing starts to move the market Tuesday. Both reports are due at 8:30 am ET.
Investment bank Morgan Stanley (Research) is slated to report earning before the bell Tuesday, which could move the financial sector.
Stock futures were down Monday evening, pointing to a lower opening for stocks Tuesday.
Market movers
Tech stocks led the way down, with the Goldman Sachs Internet index and the Philadelphia Semiconductor index both losing over one percent.
"There's a lot of uncertainty in individual names that's bringing down the whole Nasdaq," said Kim Caughey, an analyst at Fort Pitt Capitol Group.
Caughey said Google's (down $5.55 to $424.60, Research) reported success in buying a stake in America Online hurt Microsoft (down $0.07 to $26.83, Research) and Yahoo (down $1.27 to $41.05, Research), while a patent dispute involving Research in Motion's (up $0.33 to $63.01, Research) Blackberry messaging device is keeping investors on edge. "It just a big, ugly, red day out there," she said.
The market has been skittish in recent weeks after November's big gains, leaving many investors wondering whether the traditional year-end rally has already come and gone on Wall Street.
Pfizer (up $1.74 to $24.32, Research) surged about 8 percent following news Friday that the company won a court victory upholding the validity of two key U.S. patents on Lipitor, its cholesterol-lowering drug that is the world's biggest selling prescription drug.
The ruling helped other drug companies as well, with Merck (up $2.24 to $32.25, Research) rising over 7 percent, Bristol-Myers Squibb (up $0.47 to $22.49, Research) over 2 percent and GlaxoSmithKline (up $0.36 to $51.97, Research) up nearly 1 percent.
The ruling is likely to delay plans by an Indian drugmaker to introduce a generic version of the medicine.
Oil prices resumed their slide, adding to Friday's nearly $2 sell-off.
The January light crude futures contract fell 72 cents to close at $57.34 a barrel on the New York Mercantile Exchange.
But like Friday, Monday's drop in crude prices failed to excite investors.
Keeping the Dow from sinking Monday were shares of insurer American International Group (up $0.67 to $65.82, Research), which rose after a Barron's report Sunday said the company may be on the rebound after a series of scandals and executive reshuffling earlier this year.
Among the Dow's biggest decliners was Caterpillar (down $2.81 to $56.83, Research), which lost almost 4 percent. Intel (down $0.60 to $25.78, Research) and General Motors (down $0.84 to $21.05, Research) also fell.
Shares in Circuit City (up $1.45 to $22.70, Research) rose almost 7 percent after the electronics retailer posted a profit in its most recent quarter, reversing a year ago loss, and raised its guidance.
Bond prices were little changed, with yields on the 10-year treasury falling to 4.43 percent.
But yields on short term notes inverted, which has perviously been a precursor to an economic slowdown.
The dollar rose modestly against the euro and yen.
COMEX gold for February delivery added 20 cents to close at $506.10 an ounce.
In global markets, Asia stocks ended higher while European shares fell.
In other news, Time Warner (down $0.05 to $17.95, Research) is reportedly close to a deal to sell a 5 percent stake in America Online, its online unit, to search engine Google for $1 billion in cash, along with closer ties between the two in ad sales.
The deal, which was first reported in the online edition of the Wall Street Journal late in the trading day Friday, dented Microsoft (down $0.07 to $26.83, Research), which had competed for the deal. CNN/Money is a unit of Time Warner.
Google originally gained on word of the deal but saw it's fortunes reversed after renegade investor Carl Icahn, who owns a 3.1 percent stake in Time Warner and is pushing the company to sell assets, criticized the deal, saying it could undermine future asset sales.
FPL (down $0.19 to $42.76, Research) announced early Monday that it had reached an agreement to buy Constellation Energy (down $2.52 to $59.10, Research) in an $11 billion stock deal that the companies say will create the nation's No. 2 electric utility.
The deal, which was widely reported last week, pays little premium from Friday's closing price but the companies' statement says it pays a 15 percent premium on the 20-day average price ending Dec. 13.
Market breadth was negative. On the New York Stock Exchange, losers barely beat winners by a margin of five to two on volume of 1.7 billion shares. On the Nasdaq, decliners topped advancers two to one as 1.7 billion shares changed hands.
|
