Stocks Lose Steam
Updated from 3:27 p.m. EDT
Stocks in the U.S. gave up most of their big gains Monday, and went out mixed, after sudden strength in crude futures deflated the effects of a relatively positive report on recent economic data.
The
Dow Jones Industrial Average
, which began the day on somewhat soft footing, later surged some 150 points before easing to a gain of 41 points, or 0.3%, at 13,028. The
S&P 500
edged up 1 points, or 0.1%, to finish at 1427.
The
Nasdaq Composite
, however, lost 13 points, or 0.5%, to 2516, under pressure from
Microsoft
(MSFT) - Get Report
and some other suffering tech names.
The reversal came after crude oil flirted with the intraday record it
set on Friday
, reaching a high of $127.77 a barrel before receding to a gain of 77 cents at $127.06. Gold futures were up $5.90 at $905.70 an ounce.
Still, the U.S. dollar remained strong, firming by 0.5% against the euro to $1.5510 while adding 0.2% against the yen to fetch 104.32.
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Earlier, stocks got a boost after leading indicators, a collection of mostly previously released economic data from the Conference Board, ticked up 0.1% in April -- the same as the prior month, and a hair better than expected. Ian Shepherdson, chief U.S. economist with High Frequency Economics, said the consensus overshot because most economists made their forecasts before Friday's stronger-than-expected numbers on building permits.
"These data certainly reflect a weak economy but not one in recession," said the Conference Board.
Still, pointed out Art Hogan, chief market analyst with Jefferies, much of what buoyed the overall figure were gains in the stock market. "So it's a self-fulfilling prophecy, to a certain extent," he said. In addition to rising equities and the housing permits, said the board, the interest rate spread also worked to outweigh harsh slides in average weekly hours and consumer expectations.
In corporate news, Microsoft, which earlier this month dropped its attempts to take out
Yahoo!
(YHOO)
, over the weekend presented the Internet-portal operator with a
that would not constitute an outright acquisition. The software giant added, however, that it "reserves the right to reconsider" another buyout offer.
The development comes amid billionaire investor Carl Icahn's looming threat to nominate 10 people to Yahoo!'s board. Icahn recently began amassing large amounts of Yahoo! shares, saying the company acted "irrationally" in turning down Microsoft's sweetened takeout bid earlier this month. Microsoft shares shed 1.7% as Yahoo! shed a penny at $27.65, having backed off from an early climb.
Staying in tech,
Garmin
(GRMN) - Get Report
slumped 4.7% on a Needham downgrade to hold from buy.
Among other falling names in the tech patch were
Apple
(AAPL) - Get Report
, down 1.4%, and
Hewlett-Packard
(HPQ) - Get Report
, which was off fractionally at $47.11.
SanDisk
(SNDK)
was sliding 7.2% to $30.12.
On the other hand,
Amazon.com
(AMZN) - Get Report
surged 8.2% after Goldman Sachs added the stock to its "Americas Conviction Buy" list and sharply lifted its price target to $98.
Elsewhere on the equities side,
American Axle Manufacturing
(AXL) - Get Report
last Friday
with the United Autoworkers that would end a costly strike. American Axle is a key supplier to supplier to automaker
General Motors
(GM) - Get Report
, shares of which were up 1.3% to help prop up the Dow. American Axle shares lost 7.9%.
In earnings, home-improvement retailer
Lowe's
(LOW) - Get Report
said early Monday its
17.9% to $607 million, or 41 cents a share, a penny better than the average analyst estimate from Thomson Reuters. Same-store sales, or those from stores open a year or more, slid 8.4%, and the company also shaved down its full-year outlook. Shares were down 2.5%.
Elsewhere,
Campbell Soup's
(CPB) - Get Report
fiscal third-quarter earnings missed Street estimates by a penny a share, excluding a big gain from the sale of its Godiva business. Campbell's adjusted profit was down 7.8% to $165 million, or 43 cents a share. The stock was off 5.5%.
Turning to the day's analyst research, Citigroup upped chipmaker
Texas Instruments
(TXN) - Get Report
, after which shares lifted by 2.4%. At the same time,
National City
( NCC) climbed 5.2% after Citi upgraded the stock from hold to buy with a $7 price target. Citi said the bank's recent $7 billion capital raise gives it leeway to deal with its credit issues.
However, Citi also cut earnings estimates for three brokerage firms --
Goldman Sachs
(GS) - Get Report
,
Lehman Brothers
( LEH) and
Morgan Stanley
(MS) - Get Report
-- which Citi says may face more losses due to a difficult operating environment. Shares of the companies all spent time in the green earlier, but were recently down 0.8% or more.
In more negative calls,
Continental Airlines
(CAL) - Get Report
lost 4.7% after JPMorgan cut the stock to underweight. Friedman Billings downgraded
American Eagle Outfitters
(AEO) - Get Report
to market perform while easing its price target on another clothing retailer,
Abercrombie
(ANF) - Get Report
. Shares slumped 3.4% and 1.3%, respectively.
As the equities environment became less certain, Treasury prices began gaining ground again. The 10-year note and the 30-year bond were each rising 4/32 in price, yielding 3.83% and 4.57%, respectively.
The major overseas markets were almost uniformly higher. In Asia, Tokyo's Nikkei 225 added 0.4% overnight, and Hong Kong's Hang Seng Index was ahead by 0.5%. Among European bourses, the FTSE 100 in London tacked on 1.2%, and Germany's Xetra Dax was better by 1%. The Paris Cac bounced 1.3%.