Stocks Finish Mixed on Late Selloff
NEW YORK (
) - Stocks closed on a mixed note on Monday as enthusiasm about a bigger-than-expected jump in October retail sales and a fresh round of merger news wavered in the session's final hour.
The
Dow Jones Industrial Average
finished higher by 9 points, or 0.1%, at 11,201. The
S&P 500
slipped 1 point, or 0.1%, to close at 1197, while the
Nasdaq Composite
lost 4 points, or 0.2%, to settle at 2513.
Capital goods, retail and utilities stocks were among the session's best performers.
Caterpillar
,
JPMorgan Chase
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and
Boeing
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were the biggest winners among the blue chips.
Energy, materials and technology shares showed the weakest performance. Within the Dow,
Walt Disney
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,
Intel
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,
Cisco
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,
Exxon Mobil
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and
Chevron
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were the weakest performers.
Equities rose in morning trades after the Commerce Department reported a 1.2% increase in
October retail sales, which outpaced expectations for a 0.7% uptick and September's rise of 0.7%.
Excluding autos, sales rose 0.4% in October, meeting estimates but falling short of September's growth of 0.5%.
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"Retailers have made a push to offer pre-holiday shopping deals to encourage consumers to buy now and capture sales even as the expense of higher margins. While this may hurt late November and December retail sales figures, it may offer a boost to the economy leading up to the holidays," said Jim Baird, partner and chief investment strategist for Plante Moran Financial Advisors.
Manufacturing in the New York region suffered in November as the
New York Fed's Empire State Manufacturing index fell to -11.14 in November, after October's reading of 15.73. Economists had been anticipating a reading of 11.7, according to Briefing.com.
Business inventories grew 0.9% in September, the Commerce Department said, after similar growth in August. According to Briefing.com, the increase met economists' forecasts.
Deal news also was the focus of the markets for much of Monday's session. Mining-equipment shares gained ground on news that
Caterpillar
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plans to acquire
Bucyrus
(BUCY)
in a deal worth $8.6 billion, including debt.
Bucyrus shares jumped 29% to cloe at $89.80. Rivals also gained on the news.
Joy Global
(JOYG)
was up 7.5% to $77.77 and
Terex
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rose 2.9% to $25.13. Caterpillar's stock gained 0.9% to $81.82.
Shares of
Isilon Systems
(ISLN)
were up 28.5% to $33.77 on news that
EMC
(EMC)
agreed to buy the networking storage company for $2.25 billion. EMC's stock was down 1.2% to $21.45.
European stocks rose after
Ireland's government said it isn't seeking a bailout from the European Union the FTSE in London rose 0.4% and the DAX in Frankfurt gained 0.8%.
Japan's Nikkei gained 1.1% after a new report said its economy expanded by 0.9% during the third quarter. Hong Kong's Hang Seng shed 0.8%.
"I think some of the pressure on equities on Friday was related to the events in Ireland and possibly some liquidation to help funding over there, but what's helping the equity market this morning is better economic news," said Michael Strauss, chief economist and market strategist at Commonfund. "There was a better-than-expected retail sales gain and with inventories, it looked like most of the inventory increases were needed to replenish depleted stocks."
"We believe third-quarter GDP will be revised upward from 2% to 2.5% and fourth-quarter GDP will be revised upward from 2.5% to 3%," he added.
Shares of
Horizon Bancorp
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were up 1.4% to $25.28 on the company's plan to repay government bailout money by repurchasing the preferred shares held by the U.S. Treasury Department over the next three years from earnings. The plan avoids a dilutive capital raise.
China Sunergy
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easily beat analysts' profit estimates for 20 cents a share with earnings of 37 cents a share, lifting the stock 2.2% to $4.69. The news lifted shares across the sector.
Trina Solar Limited
(TSL)
was up 3.6% at $25.42 while
Yingli Green Energy Holdings
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,
Evergreen Solar
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,
Suntech Power Holdings
(STP)
and
Solarfun Power Holdings
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were also winners on Monday.
Apple
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shares were ticking 0.1% higher to $308.36 ahead of an iTunes-related announcement that the company will make on Tuesday. The company is expected to announce that it has won rights to music by The Beatles, filling a gap in its collection, the
Wall Street Journal
reported citing sources close to the matter.
Akamai Technologies
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saw its stock lose 5.1% to $47.21 after Oppenheimer cut its rating to perform from market perform, citing the end of its streaming serviced contract with
Netflix
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.
Shares of
Colgate-Palmolive
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were up 2.3% to $78.37 on a Citigroup update to buy from hold. Citigroup said the consumer products company is turning around its business and gaining market share.
Ford
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shares jumped 4.3% to $17.04 on news that the company will sell its first completely electric, zero CO2-emissions passenger car, the Focus Electric, in 19 cities in the U.S. in late 2011. The stock was also getting a boost from the robust auto sales seen in the morning's October retail sales report.
Lowe's
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stock fell 1% to $21.46 despite topping consensus estimates by 1 cent with third-quarter adjusted earnings of 31 cents a share although sales of $11.6 billion missed analysts' revenue estimate of $11.75 billion.
For the fourth quarter, Lowe's forecasts earnings of between 16 cents and 19 cents a share and full-year earnings are expected to be between $1.37 and $1.40 a share. Analysts have been anticipating fourth-quarter earnings of 18 cents a share and full-year earnings of $1.41 a share.
BHP Billiton
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withdrew its $40 billion offer to buy
Potash Corp. of Saskatchewan
(POT)
on Sunday, citing government opposition. BHP's stock ticked higher by 0.8% to $87.74 while Potash's stock was down by 1.8% at $137.35.
In commodity markets, the January crude oil contract was up by 5 cents to trade at $84.93 a barrel. The December gold contract added $3, or 0.2%, to settle at $1,368.50 an ounce.
The dollar traded higher against a basket of currencies, with the dollar index up by 0.5%, and the benchmark 10-year Treasury note weakened 30/32, lifting the yield to 2.893%.
.
--Written by Melinda Peer and Shanthi Venkataraman in New York
.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
