Stocks moved lower on Monday, hampered by a jump in crude oil prices to nearly $60 a barrel as colder temperatures in the northeast raise speculation of increased consumption. Meanwhile, Treasury yields extended gains and February gold climbed to $512.60.
The Dow Jones industrial average was down 42.5 points to 10,835.01. The broader Standard & Poor's 500 index fell 2.99 points to 1,262.09. The tech-heavy Nasdaq composite index lost 15.73 points to 2,257.64, led down by weakness in semiconductor stocks amid profit taking.
Many market watchers expect a yearend stock rally, but the market may consolidate or pull back beforehand, as the recent uptrend slowed last week, says Standard & Poor's MarketScope.
On the economic front. the November ISM non-manufacturing index dipped to 58.5 in November, after rising nearly 7 points to 60.0 in October, continuing a bumpy, but healthy pace of growth, says Action Economics. The index was below forecasts and is just off its 6-month average of 59.9. Prices paid fell to 74.2 from 78.0. New orders rose to 59.5 from 58.2. Employment climbed to a solid 57.0 from 52.9. Export orders rose to 57.0, while imports rose to 56.5. "Despite the dip in the headline index, the report reflects a very healthy services sector, but as it doesn't provide any real new information, may not have much impact on the markets," says Action Economics.
In deal news, Boston Scientifc (BSX) offered to buy Guidant (GDT) in a $25 billion deal, or $72 per share. The offer represents premium of about 14% over the $63.43 per share value for Guidant proposed by Johnson & Johnson (JNJ).
Verizon Communications (VZ) announced that it is considering putting its phone directory business up for sale for $17 billion.
Boeing (BA) lost a $9.5 billion 150 aircraft order from China, which inked the deal with Europe's Airbus.
In Europe, London's FTSE-100, Germany's DAX, and France's CAC-40 indexes finished with modest losses.
In Asia, Japan's Nikkei index climbed 129.71 points (0.88%) to 15,551.31 -- a new five-year high. Stocks were boosted by a strong report on capital spending in the third quarter and yen weakness, says Standard & Poor's MarketScope. A weaker yen makes Japanese products more attractively priced in foreign markets.
The Hang Seng index fell 41.56 points (0.27%) to 15,158.82 on profit taking.
Treasury bonds fell in price on Monday. The bond market largely marked time, tracking a back-up in global bond yields amid a low-volume sell-off -- basically a continuation of the move from last week, says Action Economics. The yield on the 10-year note rose to 4.56%.