Stocks try to stabilize

Nasdaq composite adds a few points, while blue chips wobble, and subprime mortgage worries vie with enthusiasm about M&A activity, lower oil prices.

By Alexandra Twin, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- The Nasdaq rose and the broader market wobbled Monday afternoon as investors weighed the latest batch of merger and acquisition news, but showed caution amid ongoing concerns about the subprime mortgage lenders.

The Dow Jones industrial average (up 14.74 to 12,291.06, Charts) added a few points 3 hours into the session, while the broader S&P 500 (up 0.02 to 1,402.87, Charts) index hovered near unchanged. The tech-heavy Nasdaq (up 5.00 to 2,392.55, Charts) composite gained 0.2 percent.

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Stocks were skittish Friday but managed to end the week higher, as investors recovered a bit from the previous week's big selloff.

Monday was again volatile, as investors weighed competing influences at the start of a busy week for economic news. Reports due later in the week include retail sales, producer and consumer prices and manufacturing.

"Basically, we're in a holding pattern right now," said Peter Cardillo, chief market economist at Avalon Partners. "The impact of what happened a few weeks ago is behind us, and the market is trying to consolidate."

Cardillo said that stocks were also a little choppy because of the worries about subprime and because Friday is a quadruple witching day. The quarterly event in which stock futures and options and stock index futures and options all expire simultaneously can cause gyrations in the underlying stocks.

Monday brought a number of merger announcements.

Schering Plough (down $0.14 to $23.71, Charts) is buying Akzo Nobel's drug unit for $14.4 billion in cash.

Dollar General (up $4.39 to $21.17, Charts) has agreed to be taken private by Kohlberg Kravis Roberts & Co. in a $7.3 billion cash and debt deal.

UnitedHealth Group (up $0.06 to $53.06, Charts) said it was buying Sierra Health Services for $2.6 billion in cash.

In addition, Ford Motor (up $0.00 to $7.93, Charts) said it was selling its luxury Aston Martin line for $925 million.

However, the deal news was countered by new worries about subprime mortgage lenders.

New Century Financial (Charts) said its lenders have cut off its financing, in the latest blow to the mortgage lender to people with less than top credit. The New York Stock Exchange delayed opening trading for the stock and later announced that it was considering suspending trading.

In addition, Countrywide Financial (down $1.21 to $34.89, Charts) said it expects some short-term earnings volatility due to events in the subprime mortgage lending market. Shares slumped about 3 percent.

Market breadth was negative. On the New York Stock Exchange, decliners narrowly edged advancers on volume of 500 million shares. On the Nasdaq, losers barely topped winners as 590 million shares traded hands.

U.S. light crude oil for April delivery fell $1.35 to $58.70 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery rose $1.80 to $653.80 an ounce.

Treasury prices rose, lowering the yield on the 10-year note to 4.55 percent from 4.58 percent late Friday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar fell versus the yen and the euro.


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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.