Stocks finished essentially flat on Monday as merger news and lower oil prices was not enough to extend the previous session's rally.
The Dow Jones industrial average closed up 11.23 points, or 0.11%, to 10,550.24. The broader Standard & Poor's 500 index slipped 0.35 points, or 0.03%, to 1,183.82. The Nasdaq composite index gained 8.75 points, or 0.42%, to 2,094.09.
Looking ahead, Tuesday will be a hectic day on the earnings reporting front. Among the companies releasing results are three prominent retailers: office supply outfit Staples (SPLS ), home-improvement chain Home Depot (HD ), discount giant Wal-Mart (WMT ). Two big technology names on the earnings calendar are Hewlett-Packard (HPQ ) and Network Appliance (NTAP ).
On the economic front, investors will get a reading on inflation on the wholesale level. The producer price index is expect to have risen 0.4% in October, vs. a 0.1% increase in the previous month. Excluding volatile food and energy prices, the index is still expected to show an increase of 0.4%.
On Monday, the Dow and the Nasdaq were propped up by tech stocks. Microsoft (MSFT ) shares were higher in their first day of trading after the Friday, Nov. 12, deadline for investors to purchase the software giant's shares in order to receive a $3 a share special cash dividend.
Also in tech news, computer server maker Sun Microsystems (SUNW ) over the weekend launched the eagerly-anticipated next version of its operating system.
But chipmaker Intel (INTC ) saw First Albany lower its investment rating on the company to underperform from buy.
Oil prices continued to ease Monday, with NYMEX crude finishing near $46.80 per barrel as forecasts of warmer weather and easing strike tensions in Nigeria helped spur further softness in prices. Among some of the other helpful factors, Iraq announced that its northern oil exports are at a post-war high, according to economic-research outfit Informa.
The oil news pressured energy companies such as Exxon Mobil (XOM ) and ChevronTexaco (CVX ).
In other stocks news, home-improvement retailer Lowe's (LOW ) posted quarterly profits that topped Wall Street's expectations.
Retailer Wal-Mart (WMT ) over the weekend said it sees November sales in line with its projections and plans to release its earnings report on Tuesday.
Also in retailing, Federated Department Stores (FD ), which owns Macy's and other big retailers, wants to sell its credit-card portfolio for about $3 billion, according to the New York Post.
And bookseller Barnes & Noble (BKS ) posted lower quarterly profit because of higher expenses and soft demand for bestseller titles.
The retail news came on the heels of Friday's report that October retail sales rose 0.2%, in-line with median estimates, while sales excluding autos jumped 0.9%, exceeding estimates.
Drugmaker Merck (MRK ) was faced with fresh media reports quoting internal reports that the outfit knew about the heart risks of its arthritis drug Vioxx long before it was pulled from the market.
Tyson Foods (TSN ), reported that fourth-quarter profits dropped sharply after increased feed costs offset higher average prices for chicken, beef and pork. In merger news, Kraft Foods (KFT ) announced plans to sell its Life Savers candy and Altoids breath mints units to Wrigley (WWY ) for about $1.5 billion.
Meanwhile, Dow Jones (DJ ), agreed to purchase finance and investing website MarketWatch (MKTW ) in a deal valued at $519 million.
Large insurer AIG (AIG ) is near to a deal with U.S. regulators to resolve a probe into whether it helped financial services outfit PNC Financial Services (PNC ) with accounting fraud, according to the Journal.
The earnings season is nearly complete, with a lull to follow before fourth-quarter pre-announcements start to trickle out, Informa says. Overall operating profits are on track to rise 16% year-over-year for the big-cap S&P 500 index companies. That is a respectable gain and adds to the large cash pool that firms can either spend on cap ital outlays, mergers, dividends, or stock buybacks and perhaps more workers, Informa says.
Treasury prices were flat to lower after a softer reading of a regional business conditions survey in November. The yield on the benchmark 10-year Treasury note ended one basis point lower at 4.18%. Informa says the market was sluggish absent key developments. Activity had been highlighted by softer crude prices and a jittery U.S. dollar.
European stock markets closed mixed on Monday. London's Financial Times-Stock Exchange 100 index was up 9.20 points, or 0.19%, to 4,803.10 as December Brent crude oil futures fell $1.06 to $41.25 on a perception of adequate supplies and decreasing demand. Vodafone was higher amid speculation about the size of the company's dividend to be announced Tuesday. MMO2, Britain's No. 4 mobile-phone operator, was higher.
Germany's DAX index was off 9.01 points, or 0.22%, to 4,134.34 as oil prices fell. K+S AG higher after the company said third-quarter profit more than doubled on higher worldwide demand for fertilizers. Linde AG was lower after Dresdner and UBS analysts lowered their recommendations on stock. Infineon Technologies was higher after Economic Daily reported global sales of semiconductors will grow 9.6% next year.
France's CAC-40 index slipped 14.14 points, or 0.37%, to 3820.97, as Bank of France cuts its 2004 GDP growth forecast. Alstom was down after Deutsche Bank lowered its earnings forecast for the company.
In Asia, the markets finished higher on Monday. Japan's Nikkei 225 index rose 207.59 points, or 1.88%, to 11,227.57 on the back of broad gains. Japan's Elpida Memory made a solid debut, finishing well above its IPO price. UFJ Holdings rose 2.87% following news that it and Mitsubishi Tokyo Financial Group have approached unlisted JCB Co. about a tie-up with their credit card operations. Shares of Nikon jumped almost 5% after the company raised its first half forecast.
In Hong Kong, the Hang Seng index climbed 147.76 points, or 1.07%, to close at 13,932.22 led up by gains in financials, properties, and tech names.