FOX Business: The Power to Prosper
Wall Street ended in a deadlock on Monday as a late-day slide led by technology stocks prevented the Dow from landing at a fresh 2010 closing high and put a stop to the Nasdaq Composite's eight-day win streak.
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The Dow Jones Industrial Average rose 18.24 points, or 0.16%, to 11428.56, the Standard & Poor's 500 gained 0.06 points, or less than 0.01%, to 1240.46 and the Nasdaq Composite sank 12.63 points, or 0.48%, to 2624.91. The FOX 50 lost 0.87 points, or 0.10%, to 887.45.
Wall Street reached the finish line at session lows as enthusiasm about China deciding to hold interest rates steady despite inflation fears faded. Earlier in the day all three major indexes posted solid gains as the Chinese decision and tumbling U.S. dollar sent commodities like copper and stocks like AK Steel (NYSE:AKS) soaring.
Despite the late-day fizzle, many market participants see Wall Street's bullishness continuing through the end of the year.
“I think we are seeing a continuation of the Santa Clause rally, aided of course by the Chinese not raising their interest rates. I think it’s a pretty good trend in place,” Ben Willis, a NYSE trader at Sunrise Securities, told FOX Business.
Only about half of the Dow's 30 stocks advanced, led by Caterpillar (NYSE:CAT) and Chevron (NYSE:CVX). The index's weakest links were Hewlett-Packard (NYSE:HPQ) and Bank of America (NYSE:BAC).
The Nasdaq Composite closed modestly lower, breaking its eight-day win streak and backing it away from its recently-hit late-2007 highs. The index was led lower by Adobe (NASDAQ:ADBE) and Dell (NASDAQ:DELL), which unveiled a $960 million cash deal to acquire Compellent Technologies (NYSE:CML).
The earlier rally began overseas as China's Shanghai Composite surged nearly 3% after the People's Bank of China decided to keep interest rates unchanged in the face of worries about its economy overheating. China plays an outsize role in moving the markets because of its voracious appetite for commodities. Some worry that China will be too aggressive in cooling off its red-hot economy, derailing the global recovery.
Inspired by the Chinese decision, economically-sensitive copper jumped 2.30% a pound to a new record high of $4.1995. Crude oil rallied 82 cents a barrel, or 0.93%, to $88.61. Gold climbed $13.00 a troy ounce, or 0.94%, to $1,397.30.
With that in mind, Wall Street was led higher by the energy and basic materials sectors, which climbed more than 1% a piece before fading ahead of the close. Individual stocks like Rio Tinto (NYSE:RIO) and Schlumberger (NYSE:SLB) posted even steeper gains.
Commodities were also helped by the euro, which soared 1.42% to $1.3390. A weaker U.S. dollar is seen as a bullish catalyst for Wall Street because it increases demand for commodities and tends to boost exports. The currency has been slammed in recent months by the European sovereign debt crisis.
Wall Street had a slightly positive reaction to a U.S. judge ruling against President Barack Obama’s health-care law in a challenge brought by Virginia. However, analysts believe the matter will ultimately be decided by the Supreme Court. The Morgan Stanley health-care payor index spiked, but then pared its gains after the ruling. Shares of Aetna (NYSE:AET) and WellPoint (NYSE:WLP) closed off session highs.
Meanwhile, Wall Street continues to price in the likelihood that Congress will extend the Bush tax cuts before they expire at the end of the year. The Senate is expected to pass a compromise between Obama and Republicans, and Democratic leader Steny Hoyer predicted on Monday the House will approve a tax-cut bill soon after.
There weren't any major economic or earnings reports to influence U.S. markets on Monday, but there were several acquisitions, including General Electric's (NYSE:GE) $1.3 billion bid to buy Wellstream.
Greater Atlantic & Pacific Tea (NYSE:GAP), better known as A&P, filed for Chapter 11 bankruptcy protection over the weekend. The grocer collapsed under the weight of mounting debts and fierce competition from discounters. A&P said it will continue to operate thanks to $800 million in debtor-in-possession financing from JPMorgan Chase (NYSE:JPM).
General Electric (NYSE:GE) unveiled a bid to acquire U.K. oil pipemaker Wellstream for $1.3 billion in an effort to capitalize on fast growth in deepwater drilling and emerging markets. The deal, which is expected to be completed in the first quarter of 2011, would give Wellstream shareholders 780 pence in cash and a special dividend of 6 pence in cash per share.
McDonald’s (NYSE:MCD) said its customers’ private information may have been accessed during a breach. The hacked database included email, birthdate and other information, but no financial information or Social Security numbers.
Thermo Fisher Scientific (NYSE:TMO) announced plans to acquire chemical analysis company Dionex (NASDAQ:DNEX) for $2.1 billion. The $118.50-a-share bid represents a 21% premium on Dionex’s Friday close.
Dell (NASDAQ:DELL) inked a $960 million cash deal to scoop up data storage company Compellent Technologies (NYSE:CML). The price is a 3% discount to Compellent’s close on Friday. Compellent’s stock had surged since reports of a potential deal emerged.
FedEx (NYSE:FDX) said it expects its drivers to pick up almost 16 million shipments worldwide on Monday, making it the busiest day in the shipping giant’s history. FedEx said the volume is double its average daily volume and represents an increase of nearly 13% over 2009’s busiest day.
Wal-Mart (NYSE:WMT) said it will shut down its Moscow field office as it plans to enter the Russian retail market through acquisitions instead of organic store openings. In the mean time, the retail giant does not see a suitable acquisition target in the near term.
The U.K.'s FTSE 100 rose 0.82% to 5860.75, France's CAC 40 jumped 0.91% to 3892.44 and Germany's DAX gained 0.33% to 7029.39.
In Asia, Japan's Nikkei 225 rallied 0.8% to 10293.90, Hong Kong's Hang Seng advanced 0.67% to 23317.60 and China's Shanghai Composite surged 2.88% to 2922.95.