Stocks finished mixed Monday as investors digested a raft of economic data and corporate news. Moves were tempered somewhat by news about the stock-research settlement between Wall Street firms and regulators, as well as political tensions including the widening general strike in Venezuela and increasing potential for the U.S. to attack Iraq over weapons inspections.
The Dow Jones Industrial average fell 18.10 points, or 0.21%, to 8,493.29. The broader Standard & Poor's 500-stock index inched gained 1.62 points, or 0.18%, to 897.38.
The tech-laden Nasdaq composite index added 18.64 points, or 1.37%, to 1,381.69. Shares of semiconductor equipment companies rose amid hopes that all bad news has been factored into the group and signs of improvement will begin to be revealed in 2003, reported S&P MarketScope. Semiconductor and networking equipment stocks also moved higher.
In economic news set for release Tuesday, durable goods orders are expected to rise 0.5% in November. The auto sector is expected to hold back the strength on the month, despite the jump in related industrial production figures. These data will help economists fine tune fourth-quarter GDP forecasts, but will likely have no lasting impact on the market, says economic research outfit MMS International.
On Tuesday, trading on the major U.S. stock exchanges will wrap up early for Christmas Eve, at 1:00 p.m. ET. U.S. markets will be closed for the Christmas holiday Wednesday.
Among stocks in the news Monday, McDonald's (MCD), a member of the blue chip Dow average, was under pressure after Moody's Investors Service says it may cut the fast food chain's long term senior debt ratings. Last week, McDonald's warned that it sees a loss of 5 or 6 cents a share for the fourth quarter -- its first quarterly loss ever. The company blamed a price war with rival Burger King. Two weeks ago, the company said it will replace its management team.
Citigroup (C) said it will set a reserve to cover its $400 million share of the stock-research settlement with regulators. The financial services giant says it will take a $1.5 billion (29 cents per share) fourth-quarter charge for litigation, Enron matters, and increased credit reserve.
On Friday, regulators, including the SEC, NASD, NYSE, and New York Attorney General, unveiled a settlement that requires 10 firms to pay $1.4 billion for stock-research abuses.
Retail stocks fell after Wal-Mart (WMT) and Federated Department Stores (FD) warned that sales were at the lower end of forecasts despite heavy promotion and discounting. Retailers were still hoping for last-minute buying surge, but momentum already may have waned, notes economic research outfit MMS International.
In merger news, Yahoo! (YHOO) says it will acquire Inktomi (INKT) for $235 million to bolster its search business. Inktomi shares surged on the news.
There wasn't much reaction to the latest economic news. The University of Michigan reported its December consumer sentiment survey eased to 86.7 in December from a preliminary 87.0 reading -- but this was still higher than 84.2 posted in November.
The Commerce Dept. reported that personal spending for November rose 0.5% in November, after an increase of 0.4% in October. Personal income increased 0.3% in November, compared with a 0.3% revised increase in the prior month. Both readings were close to economists' forecasts.
Crude oil prices surged to 2-year highs of around $32 per barrel after Rep. Billy Tauzin (R-La.) reportedly asked the Dept. of Energy to release oil from the Strategic Petroleum Reserve. Tauzin claims two major refineries in Texas and Louisiana will run out of oil by the end of the month if there is no SPR release.
Treasuries fell in price Monday as focus on supply was the main story. The Treasury bill auction results were decent given the low yield, says MMS International.
Traders showed little interest in the spending and personal income data, says MMS. And the change in the consumer sentiment data wasn't significant to have much of a lasting impact.
The Treasury market will close early on Tuesday in observance of Christmas Eve, at 2:00 p.m. ET. The market will be closed for the Christmas holiday Wednesday.
European markets were mixed. In London, the FTSE 100 index gained 47 points, or 1.21%, to 3,936.90. Investors cheered a report showing Britain's third-quarter GDP rose 0.9%, more than expected, due to surge in house building, putting its growth ahead of European economies.
Paris' CAC 40 index added 4.77 points, or 0.15%, to 3,087.62. In Frankfurt, the DAX index lost 23.38 points, or 0.7%, to 3,000.84 amid profit taking and position-squaring ahead of the Christmas holiday.
In Japan, the markets were closed. On Friday, Japan's Nikkei 225 Index closed up 19.31 points, or 0.23%, to 8,406.88.
In Hong Kong on Monday, the benchmark Hang Seng index fell 57.76 points, or 0.60%, to close at 9570.93.