Stocks Slip As Economy Worries Outweigh Deal News
NEW YORK (AP) Stocks slumped to a weak finish Monday as lingering worries about the economy overcame optimism from a fresh round of corporate dealmaking.
Stocks had an early lift after Hewlett-Packard Co. bid 33 percent more than rival Dell Inc. for a data storage provider, but the gains faded quickly.
The Dow Jones industrial average was up as much as 91 points in early trading but turned mixed for much of the day. A slump in the final half-hour of trading left the Dow with a loss of 39 points.Despite the positive deal news, a number of worries about the economy are keeping a lid on the market, especially a reluctance among companies to create jobs. Stocks had a two-day selloff late last week after first-time claims for unemployment benefits jumped to their highest level since November. "Companies are not hiring because they don't know the rules of the game," said. Frank Ingarra, co-portfolio manager of Hennessy Funds. "When you don't know the rules, you pack up and go home." Ingarra said companies are hesitant to hire because of uncertainty surrounding costs tied to recently passed financial regulation and health care reform. The possibility of rising taxes also has companies worried about consumption, he said. In other deal news, Potash Corp. of Saskatchewan Inc. rejected BHP Billiton's $38.5 billion offer to acquire the fertilizer company, and HSBC Holdings said it was in talks to buy a controlling stake in Nedbank Group Ltd. of South Africa from Old Mutual for as much as $6.8 billion. The Dow Jones industrial average lost 39.21 or 0.4 percent, to close at 10,174.41. Other major stock indexes also ended lower. The Standard & Poor's 500 index fell 4.33, or 0.4 percent, to 1,067.36, while the Nasdaq composite index lost 20.13, or 0.9 percent, to 2,159.63.
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