Stocks Backpedal From Early Gains
Updated from 9:51 a.m. EDT
Stocks in New York erased early gains Wednesday in concert with a rebound in oil, despite an encouraging piece of economic data.
The
Dow Jones Industrial Average
, which trekked nearly 50 points higher out of the gate, was lately shedding 12 points to 12,536. The
S&P 500
gave up 3.5 points to 1382, and the
Nasdaq Composite
lost 11 points at 2470.
The early buoyancy was due in part to another big decline in oil, but futures later crossed into the green and were recently off only a dime at $128.75 a barrel. Gold futures were also climbing from a more substantial early drop, lately falling $16.20 at $901.70 an ounce.
The U.S. dollar, however, continued to reap gains, adding 0.3% against the euro to $1.5650 and firming by 0.2% against the yen to fetch 104.52.
But the major averages were weak despite those moves and a relatively positive report from the Commerce Department, which said that total orders of durable goods -- those designed to last three years or more -- fell just 0.5% sequentially last month. That's a bit worse than the prior month's 0.3% slip, but economists were expecting a 1.5% drop. Weighing heaviest was an 8% slide in transportation orders, without which total orders would have climbed 2.5%.
Among the losers on the corporate front was agricultural processor and ethanol maker
Archer Daniels Midland
(ADM) - Get Report
, which slid 3.7% after saying it will offer up to 35 million equity units for $50 apiece in an effort to raise $2 billion.
Also, Dow component
Coca-Cola
(KO) - Get Report
, reaffirmed its
current-quarter and full-year outlook
, though its largest bottler,
Coca-Cola Enterprises
(CCE)
lost 4.1% after cutting its second-quarter guidance to a profit fall in the mid-to-high single digits. Coca-Cola shares were down slightly at $58.42.
Fellow industrial
Dow Chemical
(DOW) - Get Report
, meanwhile, announced that it has been forced to ramp up product prices by up to 20% as it's being bombarded by the soaring costs of energy, feedstock, and transportation. The price hike will take effect on June 1. Shares ticked up 12 cents at $40.35.
Elsewhere, a German business paper reported that Sweden's SEB and France-based BNP Paribas and Societe Generale might be interested in trying to acquire
Citigroup's
(C) - Get Report
Citibank unit. The banks are also reportedly Deutsche Postbank and
Allianz's
(AZ)
Dresdner Bank.
Citigroup, a member of the Dow, was off 0.8%; Allianz rose 1.1%.
Meanwhile, merger discussions between United Airlines operator
UAL
(UAUA)
and
US Airways
(LCC)
evidently have fallen apart,
CNBC
reported, citing people with direct knowledge of the talks. Shares of UAL slumped 2.1% as U.S. Airways lost 5%.
UPS
(UPS) - Get Report
was one of the early winners, gaining 3.2% after saying it's pursuing an agreement to provide transportation in its air network for all of DHL's express, deferred and international package volume within the U.S. UPS also would provide airlift for DHL packages between the U.S., Canada and Mexico.
Also, a Detroit paper reported that carmaker
Ford
(F) - Get Report
plans to slash its salaried work force by up to 12% as the company suffers from harsh economic conditions. Shares of Ford ticked up 2 cents at $6.82.
Treasury prices were losing ground. The 10-year note was down 12/32 in price to yield 3.97%, and the 30-year bond surrendered 21/32 in price, yielding 4.68%.
Markets abroad were mixed. In Asia, Tokyo's Nikkei 225 sank 1.3% overnight, and the Nikkei 225 slipped 0.1%. Europe fared better however, as London's FTSE 100 rose 0.1% and Germany's Xetra Dax climbed 0.9%. The Paris Cac jumped 1.4%.