Stocks Stuck in Neutral

Wall Street is little changed to begin the week, despite big gains for Ford and Wrigley. Airline stocks such as UAL and Continental are declining.
By Sarina Penn ,

Updated from 9:49 a.m. EDT

New York's major averages were little changed early Monday as investors awaited the upcoming

Federal Reserve

gathering amid merger news and positive earnings reports.

The

Dow Jones Industrial Average

traded on both sides of the flat line before recently rising 1 point at 12,893. The

S&P 500

also rose 1 point, to 1399, and the

Nasdaq Composite

gained 3 points to 2426.

The Fed will begin its two-day meeting Tuesday, and it is widely expected to cut the fed funds target rate by 25 basis points. Many analysts also believe the central bank will signal a pause in its months-long easing cycle, which since September has taken the overnight lending rate down three percentage points to 2.25%.

On the corporate side, among the day's winners was

Wrigley

(WWY)

, which shot up 22.9% to $76.74 after Mars and

Berkshire Hathaway

(BRK.A) - Get Report

said they would acquire the chewing-gum outfit for roughly $23 billion, or $80 a share.

Wrigley also beat analysts' first-quarter expectations with earnings that surged 18.1% to $168.6 million, or 61 cents a share

Ford

(F) - Get Report

was also advancing on word that Kirk Kerkorian's Tracinda has collected a 4.7% in the automaker, or about 100 million shares, and plans to offer $8.50 each for an additional 20 million shares. Ford was up 9.1% to $8.18.

Also, United Airlines parent

UAL Corp.

(UAUA)

said it would abandon talks with

Continental

(CAL) - Get Report

but also indicated that it will explore other merger options. Continental said this weekend it would

remain independent

.

UAL shares were off 7%, and Continental lost 4.1%.

Elsewhere, Dow component

Verizon

(VZ) - Get Report

posted

in-line first-quarter earnings

. Separately, health insurer

Humana

(HUM) - Get Report

padded its full-year earnings guidance as first-quarter income jumped 12.5% and topped the average Wall Street consensus. Shares of both were up around 2%.

On the tech side,

Yahoo!

(YHOO)

and

Microsoft

(MSFT) - Get Report

drifting lower after a weekend deadline for Yahoo! to respond to Microsoft's takeover bid passed without any comment from either company. Shares of Microsoft shed 1.4%, while Yahoo! fell fractionally at $26.72.

Traders were also dealing with another new high for crude oil, which reached $119.93 a barrel before pulling back by 20 cents at $118.32. Gold was adding $2.20 to $891.90 an ounce.

The U.S. dollar was slipping 0.2% against the euro at $1.5590 and fell 0.1% against the yen at 104.42.

That came as the European Union predicted that eurozone countries would see inflation spike to 3.2% this year from 2.1% in 2007. The forecast could keep the European Central Bank from making cuts to its own benchmark lending rate, even as many of its member countries suffer economic slowdowns.

Treasury prices were mixed. The 10-year note was up 2/32 in price to yield 3.86%, and the 30-year bond fell 8/32 in price, yielding 4.61%.

Markets overseas were mostly rising. The Nikkei 225 in Japan added 0.2% overnight, and the Hang Seng Index in Hong Kong climbed 0.6%. As for European bourses, London's FTSE 100 was ticking up, and Germany's Xetra Dax advanced 0.6%. The Paris Cac was up 0.9%.

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