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Stocks Finish Mixed as Global Issues Weighed


NEW YORK (TheStreet) -- The major U.S. stocks indices finished in mixed territory Monday as investors weighed more evidence of a cooling Chinese economy against expectations that Greece was set to receive final approval of a new bailout package.

The Dow Jones Industrial Average closed higher by 37.7 points, or 0.3%, to 12,960. The S&P 500 was up 0.2 points, or 0.02%, to 1371 and Nasdaq was down 4.7 points, or 0.2%, to 2984, weighed down by Yahoo! (YHOO), Oracle (ORCL) andResearch In Motion (RIMM).

With no U.S. economic data releases on Monday, the focus turned to news abroad, including Greece's progress on getting a second bailout. Last week, the country successfully completed its debt swap with private investors, a deal that was subsequently declared as a "credit event" triggering payouts related to credit default swaps. Euro leaders Monday are expected to meet in Brussels in order to sign off on $170 billion worth of aid for Greece.

China reported slower than expected export growth in the last month. The country's trade deficit hit $31.5 billion in February, its largest trade deficit since 1989, as exports to debt-troubled Europe weakened. Exports rose at 18.4%; however, they were 23.6% lower than January's levels.

The data, together with recent reports on factory output and retail sales, suggest slowing growth in China. On the upside, Japan reported that its machinery orders rebounded in January, suggesting future growth momentum.

European markets closed mixed, although Germany's DAX eked out a 0.3% gain and London's FTSE posted a 0.05% gain. Japan's Nikkei Average closed down 0.4% on Monday and Hong Kong's Hang Seng finished up 0.23%.

The Federal Reserve will make an announcement later this week on monetary policy, which though not expected to change will nevertheless be subject to intense scrutiny by investors watching for clues of some kind of bond buying later this year. The week is packed full of economic data, including a regional manufacturing report on Thursday and a consumer sentiment reading on Friday.

Also up this week are results of the latest bank stress tests. "The market needs clearer direction, which may come with more economic data ... [but] if we see something with the financial sector, that could spook markets and we could see a pullback," said Mark Martiak, senior wealth strategist with Premier Financial Advisors.

"Be prepared for a slight pullback and definitely more volatility. ... The steep decline last week prepared us for it," he added, referring to last Tuesday's selloff in reaction to China's announcement that it will target a lower 7.5% GDP growth for 2012.


Stocks finished slightly higher Friday despite the ruling from the International Swaps and Derivatives Association on Greece that the nation was technically in default, which initiated credit default swaps.

The U.S. jobs report Friday showed a third consecutive month of plus 200,000 job additions in February. For the week, the Dow fell 0.4%, while the S&P 500 and Nasdaq edged marginally higher.

In corporate news, Chinese online video giant Youku.com (YOKU) announced that it is buying peer Tudou (TUDO) in an all-stock deal valued at more than $1 billion. The combined entity will be called Youku Tudou and become a leading online video company in the world's largest Internet market. Tudou reported a net loss of 511.2 million yuan ($81.2 million) last year, while Youku on Monday posted a net loss of 172.1 million yuan. Youku shares jumped 27.4% to $31.85 while Tudou shares surged 156.5% to $39.48.

FuelCell Energy (FCEL) reported a first-quarter loss of 5 cents a share compared with the loss of 6 cents a share expected by analysts. Shares gained 7.3% to $1.61.

Carnival (CCL) shares rose 1% to $30.88 after being upgraded to outperform from underperform by Exane BNP Paribas. Shares have been hurt of late by its cruise ship accidents.

PepsiCo (PEP) on Monday named former senior Wal-Mart (WMT) executive Brian Cornell to head Pepsi's largest and most profitable unit, the Americas-wide food division. PepsiCo has also named longtime company executive John Compton to the new position of president. It's viewed that the appointments position both men, and European operations chief Zein Abdalla, as the top internal candidates to succeed CEO Indra Nooyi, who has been getting heat from investors. Shares added 1.3% to $63.94.

Japan's Asahi Kasei agreed to buy Zoll Medical (ZOLL), the medical equipment maker, for $2.21 billion.

Asahi Kasei, which makes chemicals and construction materials, agreed to buy Zoll for $93 a share in a tender offer. The transaction price is a premium of 29.6% over Zoll's average closing stock price over the last 30 trading days. Shares of Zoll surged 23.8% to $92.94.

April oil futures settled lower by $1.06 to $106.34. In other commodities, April gold futures finished down $11.70 to $1,699.80 an ounce.

The dollar index was 0.19% lower. The benchmark 10-year Treasury was flat with a yield of 2.03%.

-- Written by Andrea Tse and Chao Deng in New York.

>To contact the writer of this article, click here: Andrea Tse.

>To follow the writer on Twitter, go to http://twitter.com/atwtse .

>To submit a news tip, send an email to: tips@thestreet.com.

Copyright 2011 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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