Stocks Flat After Six Weeks of Increases, Interrupted by Europe
NEW YORK ( TheStreet) -- Major U.S. stock indices halted their ascent Monday as doubts arose about whether the European Central Bank will step in to stabilize the eurozone's sovereign debt markets.
Investors betting on intervention flinched after the ECB characterized a report in German magazine Der Spiegel about a plan for the central bank to cap government bond yields in troubled eurozone countries such as Spain and Italy as "misleading."
Germany's Bundesbank also threw cold water on the idea of an ECB bond-buying program, saying it "holds to the opinion that government bond purchases by the Eurosystem are to be seen critically and entail significant stability risks."
The Dow Jones Industrial Average fell 4 points to 13,272, trading in a range of less than 50 points on the day. The blue-chip index started the session up 8.7% so far in 2012 and is riding a six-week streak of gains.Breadth within the Dow was negative, with losers outpacing winners, 19 to 11. The biggest percentage decliners were American Express (AXP) and Verizon (VZ). Blue-chip gainers included Bank of America (BAC), Hewlett-Packard (HPQ) and JPMorgan Chase (JPM). Shares of HP closed up 3% with the PC and printer giant's fiscal third-quarter report due after Wednesday's closing bell. The average estimate of analysts polled by Thomson Reuters is for a profit of 98 cents a share on revenue of $30.1 billion in the May-to-July period. The S&P 500 closed flat at 1,418, while the Nasdaq declined less than 1 point to 3076. Apple (AAPL - Get Report) was a standout gainer, surging 2.6% to a new all-time high as excitement builds for the expected launch of the iPhone 5 next month. The session's peak is $664.75, and its market value has swelled above $619 billion, allowing it to claim the title of the most valuable company of all time. Both the Dow and S&P 500 pulled back after finishing within shouting distance of their 2012 closing highs of 13,279 and 1,419, respectively, on Friday. At the same time, both indices were also nearing multi-year highs dating back to May 2008 before the financial crisis kicked in. "The suggestion here is that no major program will be announced any time soon, despite what European Central Bank President Mario Draghi suggested at the European Central Bank policy meeting on Aug. 2," said Christopher Vecchio, currency analyst at DailyFX, about the Bundesbank commentary. There were no major U.S. economic releases scheduled for Monday, but events later this week include the release of the minutes from the most recent Fed policy meeting at the end of July and initial jobless claims on Thursday. Key upcoming events abroad include the HSBC flash manufacturing purchasing managers data for China on Wednesday, and German economic growth figures and a meeting in Berlin of German Chancellor Angela Merkel and French President François Hollande to discuss the euro crisis on Thursday. Greek Prime Minister Antonis Samaras is also expected to meet with European leaders later this week.
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