A half-decent advance, spurred in part by the departure of
CEO Philip Purcell, turned into meager gains for stock proxies Monday, as a spike in oil prices and profit-taking in the financial sector ate into the early gains.
The price of crude oil again raced higher, gaining $2.08 to $55.62 per barrel, fast approaching its all-time high of $58.28 touched on April 1. That was enough to shave off some earlier buying enthusiasm, especially ahead of key inflation data due on Tuesday and Wednesday.
Dow Jones Industrial Average
ended higher by 9.93 points, or 0.1%, at 10,522.56, after rising to an intraday high of 10,589. The
added 2.71 points, or 0.2%, to 1200.82, off a high of 1206. The
advanced 5.96 points, or 0.3%, to 2068.56, off a high of 2078.
But let's face it, all the drama on Monday was provided by Morgan Stanley, whose board chose to sweeten an otherwise bitter preannouncement of weak second-quarter earnings with Purcell's ousting.
The Amex Broker/Dealer index eventually finished in the red, losing 0.21%, on profit-taking of earlier gains. But Morgan Stanley shares remained higher, advancing 2.0% on the day. And fellow brokerage
(which also issued a profit-warning earlier this month) also gained 0.2%. Interestingly, it was those brokers that haven't warned that took a hit in afternoon trade;
lost 1.17% and
Big Bad Brokers
It's barely a secret anymore that Wall Street likes bad news. But when shares of Morgan Stanley rally after the company issues a profit warning, one could ask where the buying opportunity lies.
Some say it was right there with the warning: Purcell was ousted in a clear response to pressure, not only from some of the firm's alumni, but from investors who've seen their shares underperform Morgan's peers in the broker-dealer universe.