Major stock indexes ended higher Monday after reversing earlier losses. Some of the factors that drove Friday's selloff appeared to have stabilized: oil prices fell, the dollar recovered some lost ground, and the 10-year Treasury note rebounded from a steep slide. The market's strength may have also reflected expectations of a strong stock market performance around the Thanksgiving holiday.
The Dow Jones industrial average ended up 32.51 points, or 0.31%, to 10,489.42. The broader Standard & Poor's 500 index was up 6.90 points, or 0.59%, to 1,177.24. The Nasdaq composite index gained 14.56 points, or 0.70%, to 2,085.19.
Monday's action came amid light holiday-week trading. But quarterly profits reported by nearly three-fifths of the S&P 500 beat analysts' forecasts -- reflect a solid earnings picture for broader market.
The trading week kicked off Monday with the dollar more or less where traders left it on Friday. There appeared to be little market impact from the G20 meeting in Berlin over the weekend.
There was nothing on the U.S. data calendar Monday to provide direction. On Tuesday, Wall Street will size up a report on October existing home sales (an annualized rate of 6.75 million is projected).
Crude oil prices finished 25 cents lower Monday to $48.64 a barrel on profit taking from Friday's late rally.
Among sectors on the move in Monday's session, semiconductor, disk-drive, and networking issues came under pressure after a Merrill Lynch report stating that worldwide PC sales peaked at 12% for 2004 and that unit growth for 2005 and 2006 should decline to about 9% and 6%, respectively.
News of a possible merger between regional wireless carrier AirGate (PCSA ) and Alamosa Holdings (APCS ) sparked an uptick in the wireless sector. Both stocks were up Monday afternoon.
Monday brought some other modest stirrings of M&A activity. A unit of conglomerate Loews (LTR ) said it would buy Gulf South Pipeline from a joint venture of Entergy (ETR ) and privately held Koch Energy for $1.14 billion. Also, Northern Trust (NTRS ) will acquire a financial services unit from Baring Asset Management for approximately $480 million.
In company news, Internet search engine Google (GOOG ) shares were 2.9% lower Monday following reports that company executives were selling stock. The lockup period, during which company insiders were restricted from selling shares following Google's August IPO, expired last week.
Other marquee technology names were also making headlines. Software maker PeopleSoft's (PSFT ) board reaffirmed its view that tech giant Oracle's (ORCL ) unsolicited $24 per share tender offer is inadequate.
Banc of America downgraded pharmaceutical company Forest Labs (FRX ) to sell from neutral, citing risks tied to upcoming trials for Forest's Lexapro compound and the earlier-than-expected entrance of a generic version of the company's anti-depressant drug Celexa. Shares were down nearly 9% at the market's close.
Piper Jaffray raised its target price for Apple Computer (AAPL ) to $100 and reiterated the company's outperform rating based on widespread success of iPod handheld music player. Shares were up over 11%.
In earnings news Monday, Campbell Soup (CPB ) reported a quarterly profit of 56 cents, exceeding analysts' expectations by four cents. The shares were up nearly 5%.
Toy retailer Toys "R" Us (TOY ) reported a quarterly loss of 12 cents, three cents better than expectations, and the stock rose slightly.
On the downside, donut maker Krispy Kreme's (KKD ) posted a third-quarter loss as same-store sales dropped 6.4%. The shares slid nearly 16%.
Looking ahead, tax specialists H&R Block (HRB ), food manufacturer H.J. Heinz (HNZ ) are set to report results Tuesday. Alcoholic beverage company Brown-Forman (BF ) and Deere & Co. (DE ) are also expected to report Q4 earnings per share Tuesday.
Two weekly measures of comparable-store sales at major retailers, the ICSC-UBS Stores Sales and Redbook reports, are due out Tuesday.
The 10-year Treasury note rebounded from a steep slide while prices for the two-year note eased ahead of an auction Tuesday. Action Economics says the auction will be of interest, especially considering Greenspan's hawkish tone on inflation last week and the ongoing concern over foreign financing of the U.S. deficits. The yield on the benchmark 10-year note ended at 4.17%.
European stock markets ended lower Monday, though prices came off the worst levels of the session. London's Financial Times-Stock Exchange 100 index shed 27.7 points, or 0.58%, to 4,733.10. Rightmove reported Monday that U.K. property prices fell by 1.7% on average on the month through to mid-November. Cambridge Antibody Technology Group surged after AstraZeneca (AZN ) bought a 19.9% stake in the company. Cable & Wireless (CWP ) shares fell after Credit Suisse lowered its recommendation on the stock to underperform from neutral.
Germany's DAX index declined 10.91 points, or 0.26%, to 4,123.98 as the IMF cut its 2005 world economic growth forecasts due to higher oil prices and the U.S. budget deficit. Bayer was lower after the company's plan to buy Roche's non-prescription health-care unit won approval from European antitrust regulators. Auto maker DaimlerChrysler's (DCX ) shares fell following a newspaper report stating the company sued its insurers after they denied claims to cover losses caused by the August, 2003, North American electricity blackout. Deutsche Lufthansa (DLAGF ) was lower after it denied it was talking to Swiss International about a merger.
In Paris, the CAC 40 index lost 24.53 points, or 0.65% to 3,774.25 as oil prices rose. Shares of semiconductor makers STMicroelectronics (STM ) and Alcatel (ALA ) were lower after Goldman Sachs predicted a "disappointing" environment for the industry next year.
Asian markets finished mixed on Monday on concerns over the U.S. dollar's weakness against regional currencies and its impact on corporate earnings. Asian tech names trended lower after Goldman Sachs downgraded its outlook for the U.S. chip sector to cautious from Neutral, which sent the Philadelphia semiconductor index 3.09% lower on Friday. In Japan, the Nikkei 225 index fell 233.45 points, or 2.11%, to close at 10,849.39. Hong Kong's Hang Seng index gained 12.92 points, or 0.09%, to finish at 13,800.60.