Techs Post Slight Gains while Blue Chips Slip
Tech stocks ended slightly higher Monday, with blue chips finishing lower, as many investors stood on the sidelines before a possible interest-rate cut from the Federal Reserve later in the week.
Much of the focus was on the Fed for a rate cut of between 25- and 50-basis points to help boost corporate spending and earnings. The Federal Open Market Committee begins its two-day meeting on Tuesday, and the Fed's policy-setting group is expected to announce its decision regarding any interest-rate change after 2 p.m. EDT on Wednesday.
"People are going to play everything pretty close to the vest until at least Wednesday, and then things are really going to pick up," Larry Lawler, head of stock trading, Dreyfus Corp., told Standard & Poor's research unit. Adding to the unusual trading activity, the second quarter ends this week, a time when fund managers often rebalance their portfolios.
Among stocks in the news Monday, Washington Mutual (WM ), the No. 1 U.S. savings and loan company, on Monday said it would acquire Dime Bancorp Inc. (DME ) for about $5.2 billion in cash and stock in a deal designed to jump-start Washington Mutual's expansion to the East Coast.
In a light volume session, the Dow Jones Industrial Average closed down 100.37 points, or 0.95%, to 10,504.22. Among the losers were Home Depot Inc. (DME ), Eastman Kodak Co. (EK ), Caterpillar Inc. (CAT ) and General Electric (GE ).
The technology-heavy Nasdaq Composite added 16.07 points, or 0.79%, to 2,050.91. Gains by computer related shares were offset by losses among bank, telecom and biotech stocks. Meanwhile, the broader S&P 500 index was down 6.74 points, or 0.55%, to 1,218.61.
U.S. Treasuries ended lower. In choppy trading, traders took profits off the table after solid gains on Friday. Traders also squared positions ahead of Wednesday's FOMC meeting.
European markets ended mixed. In London, the Financial Times-Stock Exchange 100 index was down 3.80 points, or 0.07%, to 5,661.90. In Germany, the DAX Index fell 40.03 points, or 0.67%, to 5,901.74. In France, the CAC 40 gained 29.79 points, or 0.57%, to 5,213.46.
In Asia, markets finished lower. The Nikkei lost 148.14 points, or 1.14%, to 12,896.47, as heavy declines in telecom shares pressured the market. In Hong Kong, the Hang Seng shed 13.43 points, or 0.10%, to 13,174.02.
By Heesun Wee in New York