Wall Street Ends in Stalemate; Banks Rally, Energy Drags
FOX Business: The Power to Prosper
The markets ended on the fence on Monday after falling energy stocks offset a solid performance in the banking sector.
Today's Markets
The Dow Jones Industrial Average climbed 1.1 points, or 0.01%, to 11,953, the S&P 500 was up 0.85 point, or 0.07%, to 1,272 and the Nasdaq Composite fell 4 points, or 0.15%, to 2,640. The FOX 50 was higher by 2.9 points to 895.
Banks like Citigroup (NYSE:C) and Bank of America (NYSE:BAC) led the way higher on Monday. However, weakness in the energy markets pushed major energy players like Chevron (NYSE:CVX) and Halliburton (NYSE:HAL) sharply lower on the day.
Adding to the strength was news that speciality insurer and reinsurer Allied World Assurance Holdings (NYSE:AWH) would acquire Transatlantic Holdings (NYSE:TRH) for $3.2 billion in stock. The deal values Transatlantic at a roughly 16% premium to its closing price on Friday.
However, Standard & Poor's cut Greece's sovereign debt rating by another three notches to "CCC" -- eight notches into junk territory. The ratings company noted an increased likelihood the nation that is struggling with an enormous public debt load would have to restructure its debt. A restructuring would likely include pushing back maturity dates on its loans, or forcing a haircut for shareholders, analysts have suggested.
Greece fired back, saying the ratings agency overlooked intense talks to come up with a viable solution that would stave off a restructuring or, worse, a default.
Also on the mergers and acquisitions front, VF Corp (NYSE:VFC), which owns North Face and Wrangler, unveiled plans to purchase Timberland (NYSE:TBL) in a $2 billion deal -- a 43% premium to Timberland's Friday closing price. Wendy's/Arby's Group (NYSE:WEN) also said it would offload its Arby's unit to Roark Capital Group for about $130 million in cash.
The markets were sharply in the red last week, with the broad S&P 500 shedding 2.2% and the blue chips extending the first six-week losing streak since 2002. Economic reports pointing to a slowing in the pace of the global economic recovery weighed heavily on traders' sentiment.
While there are no major economic releases slated for Monday, there are a slew of reports on tap during the remainder of the week. Traders are expected to pay particularly close attention to two closely-watched gauges of inflation, the Producer Price Index and the Consumer Price Index, which are expected to be released on Tuesday and Wednesday, respectively.
Oil was under selling pressure amid fears the slowing pace of economic growth would cut into crude demand.
Light, sweet crude was off $1.99, or 2%, to $97.30 a barrel. Wholesale RBOB gasoline was down 2 cents to $3.00 a gallon.
Gasoline prices on the consumer prices were little changed this weekend, but have been on a downtrend trend. A gallon of regular gas cost $3.70 on average nationwide, down from $3.97 last month, but still well above the $2.70 drivers paid last year, according to the AAA Fuel Gauge Report.
The euro gained 0.6% against the U.S. dollar and the greenback slipped 0.45% against a basket of world currencies.
In metals, gold fell $13.60, or 0.89%, to $1,516 a troy ounce. Silver tumbled $1.59, or 4.4%, to $34.74 a troy ounce.
Corporate News
Aetna (NYSE:AET) plans on acquiring Genworth Financial's (NYSE:GEN) Medicare supplemental-insurance subsidiary for $290 million.
Graham Packaging (NASDAQ:GRM) said it received an unsolicited takeover offer from a third party that values the company at $1.6 billion.
Vector Capital, a private equity firm, is acquiring Gerber Scientific (NYSE:GRB) for $282 million in cash.
Foreign Markets
The English FTSE 100 was up 0.12% to 5,777, the French CAC 40 gained 0.12% to 3,809 and the German DAX climbed 0.29% to 7,091.
In Asia, the Japanese Nikkei 225 slumped 0.7% to 9,448 and the Chinese Hang Seng climbed 0.39% to 22,508.