Stocks off lows despite weak economic reportMajor indexes edge higher following worse-than-expected report on manufacturing. Oil surges as the U.S. dollar slides.NEW YORK (CNNMoney.com) -- Stocks pared earlier losses Monday morning as oil prices set a new trading high and investors looked past signs of weakness in the manufacturing sector. The Dow Jones industrial average (INDU) and the Nasdaq composite (COMP) were both down roughly 0.3% about an hour into the session. The broader Standard & Poor's 500 (SPX) lost a few points. The Institute for Supply Management's index of manufacturing activity came in worse than expected. The index, which surveys purchasing managers in the sector, fell to 48.3 from 50.7 in February. Economists were expecting a reading of 49. Any reading below 50 indicates contraction in the manufacturing sector. Meanwhile, oil prices surged nearly $2 a barrel to $103.77 in New York, setting an intraday record of $103.92. Crude prices have been supported in recent weeks by speculative investment and the softening of the dollar, which makes the commodity more appealing to overseas buyers. Other commodities, such as precious metals and wheat, have also been in high demand as the dollar falters. The greenback hit a three-year low against the yen but regained some ground against the euro. The dollar sank to an all-time low against the euro last week. Ahead of the ISM report, Philadelphia Federal Reserve President Charles I. Plosser signaled that the central bank is still in favor of lowering interest rates despite concerns about inflation. Stocks took a beating Friday as economic jitters led to Wall Street's second worst day of the year. All of the major indexes declined more than 2% with the Dow industrials shedding 315 points. Corporate news. Aerospace company Northrop Grumman (NOC, Fortune 500) was awarded a $35 billion contract from the U.S. Air Force Friday, dealing a severe blow to rival planemaker Boeing (BA, Fortune 500). Northrop shares advanced 5% while Boeing dipped nearly 3%. United Technologies said Sunday it has made an offer to buy ATM maker Diebold for $2.63 billion. Diebold (DBD) shares surged 61%. HSBC (HBC) said Monday that profit rose 21% last year despite significant impairment charges due to the subprime mortgage crisis in the United States. Other markets. U.S. light crude oil for April delivery rose $1.93 to $103.77 a barrel on the New York Mercantile Exchange, with a high of $103.92 topping the previous trading high for a front-month contract of $103.05 reached Friday. Japan's Nikkei closed Monday's session 4.5% lower while European stocks dropped in midday trading. COMEX gold for April delivery was up $15 to $990 an ounce. Treasury prices fell 14/32 lifting the yield on the benchmark 10-year note to 3.56% from 3.51% late Friday. Bond prices and yields move in opposite directions. In currency trading, the dollar was lower against the euro and the yen. |
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