U.S. stocks closed narrowly mixed Monday as investors turned more cautious following the market's rise last week to its best levels of the year.
A rise in crude oil lifted Exxon Mobil (XOM), Chevron (CVX), and other energy stocks. But most stocks failed to lure buyers. A shortage of news left investors waiting for Tuesday's reports on the S&P-Case/Shiller home prices survey, the Conference Board's consumer confidence index, and the NAB House Price index to deliver fresh clues on the economy.
On Monday, the 30-stock Dow Jones industrial average finished higher by 3.32 points, or 0.03%, at 9,509.28. The broad Standard & Poor's 500-stock index edged lower by 0.56 points, or 0.05%, to 1,025.57. The tech-heavy Nasdaq composite index declined 2.92 points, or 0.14%, to 2,017.98.
Treasuries were up following the New York Fed's direct purchases of $6.069 billion in notes. The dollar index was higher. Gold futures fell.
Global markets are pricing in a strong, V-shaped economic recovery, says S&P MarketScope.
Indeed, leading central bankers such as Federal Reserve Chairman Ben Bernanke and European Central Bank President Jean-Claude Trichet have made upbeat comments about the recession bottoming. But both have said the recovery will be slow.
But doubters remain. New York University professor Nouriel Roubini, in a Financial Times commentary, said the chance of a double-dip recession is increasing because of risks related to ending global monetary and fiscal stimulus, Bloomberg News reported. The global economy will bottom out in the second half of 2009, Roubini wrote. The recession in the U.S., the U.K., and some European countries will not be "formally over" before the end of the year, while the recovery has started in nations such as China, France, Germany, Australia and Japan, he said.
"The markets have traded in recent weeks as if they were from different planets," wrote analysts from Action Economics Monday. "Most global equity markets have been buoyed by recovery enthusiasm ... [while] bonds have been boosted by concerns the recovery will be stilted." There were no significant U.S. economic reports scheduled for release Monday to refute or back up the recovery argument. Traders were bracing for Tuesday's reports on the S&P-Case/Shiller home prices survey, the Conference Board's Consumer Confidence index, and the NAB House Price index.
Eurozone June industrial orders rose by a more than expected 3.1% after falling 0.5% in May.
Among companies in the news Monday, specialty drug maker Warner Chilcott (WCRX) is expected to announce as early as today the acquisition of Procter & Gamble's (PG) prescription-drug business for more than $3 billion, say people familiar with the matter, according to a Wall Street Journal report. The deal may be a sign that the market for loans on more highly levered deals may be loosening.
Charlotte Russse Holding (CHIC) shares jumped Monday after the company reached a deal to be acquired and taken private by investment funds managed by Advent International Corp. for a price of $17.50 per share, for a total value of approximately $380 million.
Mannatech (MTEX) said its directors have suspended the quarterly cash dividend payment to shareholders, citing recent company financial performance, protracted worldwide economic recession, and the internal funding needs of new initiatives designed to accelerate sales and associate recruitment at the company.
Knoll (KNL) said it has filed a universal shelf registration statement on Form S-3 with the SEC. Upon being declared effective, the shelf registration statement will permit Knoll to offer and sell from time to time, up to $300 million of equity, debt, or other types of securities in one or more future public offerings.