U.S. stock indexes losed mixed Monday in slow trading. Investors were mostly biding their time ahead of Tuesday's kickoff of a two-day Federal Reserve policy meeting.
Consumer goods, oil & gas, and financials were among the sectors leading the S&P 500 index lower.
Meanwhile, the Nasdaq was slightly higher in the wake of a $3.9 billion purchase of Perot Systems by Dell Inc.
There appeared to be little reaction to a report the Conference Board's August Leading Economic Indicators rose 0.6% after rising 0.9% in July.
On Monday, the 30-stock Dow Jones industrial average finished lower by 41.34 points, or 0.42%, at 9,778.86. The broad Standard & Poor's 500-stock index was down 3.64 points, or 0.34%, at 1,064.66. The tech-heavy Nasdaq composite index added 5.18 points, or 0.24%, to 2,138.04.
On the New York Stock Exchange, 20 stocks were lower in price for every 10 that gained. Nasdaq breadth was 14-12 negative. Trading was active.
Stocks and commodities have been on a relentless ascent since early March as investors make bets that the world economy is healing amid improving activity in the housing and manufacturing industries, and better consumer sentiment. Analysts say breaks in the rally are perfectly healthy.
The benchmark Standard & Poor's 500-stock index tacked on a 2.5% gain last week, bringing its total rise since March to 58%, after Federal Reserve Chairman Ben Bernanke declared the U.S. recession was "likely over."
Stocks have gone too far too fast and are due for a retreat in an economy that will grow slowly, Pimco's Bill Gross said in a CNBC appearance on Monday. Comparing the growth scenarios to a choice between humorist Will Rogers and Barney Fife --the loveable but hapless deputy on the 1960s comedy "The Andy Griffith Show" -- Gross said the current market falls into the latter category. "We've got a Barney Fife market. Not sure what Barney would say about the market -- you could imagine some sort of goofy, speculative market running far too high," Gross said in a live interview. "We think the market...is due for a pullback or setback only because it's gone so far and economic growth cannot go so far."
Treasuries were faltering Monday after an earlier rally. The Fed is expected to leave interest rates unchanged at its two-day policy meeting, which begins Tuesday. But market players will be watching for any signals that Bernanke & Co. will be ceasing purchases of government debt.
The dollar was higher before this week's G20 meeting where global leaders are seeking to deliver a broad financial regulation overhaul. The group is scrambling to finalize a plan before this week's Pittsburgh summit that would commit the U.S., Europe and China to make big changes in national economic policies to produce lasting growth as the world recovers from the worst recession in decades.
Gold and crude oil futures were lower. The U.S. index of leading economic indicators rose 0.6% in August to 102.5 after a revised 0.9% increase in July (was 0.6%). This is a fifth consecutive monthly gain.
Dell Inc. (DELL) said Monday it has agreed to buy the information technology services company Perot Systems (PER) for about $3.9 billion as it looks to expand beyond the personal computer business.
Round Rock, Texas-based Dell said it will offer $30 per share in cash for Perot, which is based in Plano, Texas. That represents a 68% premium over Perot's closing share price Friday, and Perot shares shot up 66% in premarket trading Monday.
Home builder Lennar (LEN) reported wider losses, but hoped to return to profitability by 2010.
Shares of Potash Corp. (POT) fell after the fertilizer giant cuts its 2009 EPS guidance, citing continued slow demand and limited restocking by fertilizer distributors around the world.
The Associated Press reported the House is taking up emergency legislation this week to help the millions of Americans who see no immediate end to their economic miseries. A bill offered by Rep. Jim McDermott, D-Wash., and expected to pass easily would provide 13 weeks of extended unemployment benefits for more than 300,000 jobless people who live in states with unemployment rates of at least 8.5% and who are scheduled to run out of benefits by the end of September.