Stocks End Lower
With investors still shaky about the health of the nation's economy -- and hoping for more interest rate cuts from the Federal Reserve -- stocks finished slightly lower Monday.
The major averages opened higher but slipped into negative territory. In afternoon trading, the market recovered slightly and recorded modest gains. But the good news didn't last into the closing bell.
The market was still digesting government data released Friday that stated the economy lost jobs in April at the fastest pace in a decade. The data fueled hopes for more aggressive interest-rate cuts to help stimulate corporate and consumer spending. The Federal Reserve's next policy meeting is scheduled for May 15.
"I think the stock market has bottomed out. We are at the bottom of an U-shaped recovery," Steve Crowley, manager of the Kopp Emerging Growth Fund, told Standard & Poor's research unit.
Economic news aside, there was plenty of corporate news to occupy investors. Among the stocks in the news Monday, 3Com Corp. (COMS ) said it would cut its work force by 3,000 people, or 30%, as the computer network equipment maker works to return to profitability. Shares of 3Com ended down nearly 5%.
In the energy sector, independent oil refiner Valero Energy Corp. (VLO ) will buy rival Ultramar Diamond Shamrock Corp. (UDS ) for about $4 billion in cash and stock, plus the assumption of about $2 billion of debt, creating the No. 2 U.S. refinery. Shares of Ultramar Diamond Shamrock surged more than 18%, while Valero Energy stock was off 6%.
The Dow Jones Industrial Average ended down 16.79 points, or 0.15%, to 10,934.45. The Nasdaq Composite index shed 18.15 points, or 0.83%, to 2,173.38. Meanwhile, the broader S&P 500 lost 3.13 points, or 0.25%, to 1,263.48.
U.S. Treasuries ended higher, amid weakness in equities. Looking ahead to the rest of the week, the markets were expecting several key economic reports, including data on productivity in the first quarter, scheduled for release Tuesday, and the Producer Price Index for April, scheduled for Friday.
European markets finished mixed. In France, the CAC 40 ended up 42.97 points, or 0.79%, to 5,498.52. In Germany, the DAX Index lost 15.66 points, or 0.26%, to 6,122.62. U.K. markets were closed for a bank holiday.
In Asia the Nikkei ended up 107.77 points, or 0.75%, to 14,529.41. Hong Kong's Hang Seng index gained 209.79 points, or 1.57%, to close at 13,600.78.
By Heesun Wee in New York