Stocks Can't Hold Gains - TheStreet

Stocks Can't Hold Gains

Stocks rallied for much of Monday's session but gave up gains in the afternoon alongside a waning euro. Alix Steel provides The Real Story.
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NEW YORK (

TheStreet

) -- Stocks fizzled at Monday's close, continuing a volatile trend that's found stocks pacing back and forth in the last hour of trading, even after encouraging industrial production data from Europe and bullish comments from a Federal Reserve regional bank president seemed to increase confidence in global growth prospects.

After rising more than 100 points earlier in the day, the

Dow Jones Industrial Average

dawdled lower by 20 points, or 0.2%, at 10,191. The

S&P 500

slid 2 points, or 0.2%, at 1090, though the

Nasdaq

closed ahead by a fraction of a point, or 0.02%, at 2244.

Helping to bolster market sentiment were comments from St. Louis Federal Reserve Bank President James Bullard. While speaking at a conference in Tokyo, he acknowledged the seriousness of the eurozone debt crisis but said, "The global recovery at this point looks very strong and seems unlikely to be derailed," according to

Reuters

.

Also on Monday, the eurozone said industrial production rose 0.8% in April, representing a 9.5% increase from a year ago. The year-over-year gain was the strongest since January 1990, according to

The Wall Street Journal

.

Late in the day, news came down in the afternoon that

Moody's cut its rating on Greece's credit to Ba1 from A3 but kept its outlook stable. Though it was expected, some reports attributed some of the afternoon paring of gains to the downgrade.

Overseas, Hong Kong's Hang Seng increased 0.9%, and Japan's Nikkei jumped 1.8%. The FTSE in London climbed 0.7% higher, and the DAX in Frankfurt rose 1.3%.

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The Economy

President Obama is traveling to the Gulf of Mexico for another inspection of the oil spill. The president has ordered

BP

(BP) - Get Report

to establish compensation for victims of the oil spill. BP said that so far costs of the response to the oil spill are $1.6 billion. The stock was losing 8.7%, or $2.95, at $31.02.

There were no economic releases scheduled in Monday's session.

Later in the week, the market will get key inflation data with the producer price index on Wednesday and the consumer price index on Thursday. However, Joseph LaVorgna, chief U.S. economist at Deutsche Bank, believes the releases won't attract much attention because inflation pressures are so muted.

"Instead, the focus will be on production and activity gauges, such as the Fed's regional manufacturing surveys out of New York and Philadelphia on Tuesday and Thursday, respectively, as well as the national industrial production data on Wednesday," he said.

"Additionally, the weekly jobless claims take on increased importance because they correspond to the June employment survey period."

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Company News

Energy and material stocks were some of the weaker performers on the day. Financials were also weaker. According to a

Financial Times

report that quoted people familiar with financial reform negotiations with Congress,

banks will likely be forced to spin off their lucrative swaps desks.

On the Dow,

JPMorgan Chase

(JPM) - Get Report

,

DuPont

(DD) - Get Report

and

Bank of America

(BAC) - Get Report

experienced the biggest losses, while

Caterpillar

(CAT) - Get Report

,

Intel

(INTC) - Get Report

and

United Technologies

outperformed.

Blockbuster

(BBI) - Get Report

shares plunged 21.3% to finish at nearly 22 cents, making it the

New York Stock Exchange's

biggest decliner following a

Wall Street Journal

report that the company is trying to secure a $150 million debtor-in-possession loan.

Afghanistan could become one of the world's most lucrative mining centers, according to Pentagon officials, after a team of U.S. geologists discovered nearly $1 trillion in untapped mineral deposits, including iron, copper, cobalt, gold and lithium, according to a report in the

New York Times

.

Cablevision Systems

(CVC)

said it will acquire

Bresnan Communications

for $1.365 billion, lifting shares by 5%, to $24.57.

Video game company

THQ

(THQI)

reduced its first-quarter and full-year guidance to be more in line with lower-than-expected sales of its

UFC Undisputed 2010

game and a stronger U.S. dollar. The stock lost 11.5%, to $4.91.

Mosaic

(MOS) - Get Report

is in talks to buy Mexican fertilizer company

Grupo Fertinal

for as much as $1 billion, according to the

Journal

. Shares slipped 2.8%, to $44.97.

Shares of

Charles Schwab

(SCHW) - Get Report

lost 2.9% after the broker said average daily client trades surged 17% month over month in May and by 14% from a year ago, although FBR Capital Markets said May activity was lower than expected but reiterated its outperform rating on the stock.

On Friday night, an anonymous bidder agreed to pay more than $2.6 million in exchange for the privilege of lunching with

Berkshire Hathaway

(BRK.B) - Get Report

chief executive

Warren Buffet, a record for the annual charity auction.

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Commodities and the Dollar

Crude

oil for July delivery added $1.34 to settle at $75.12 a barrel.

Elsewhere in commodity markets, the August

gold contract settled $5.70 lower, at $1,224.50 an ounce.

The

dollar was trading lower against a basket of currencies, with the

dollar index down by 1%.

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>>Treasuries

Treasuries

The benchmark 10-year Treasury was losing 9/32, lifting the yield to 3.264%.

The two-year note was down 1/32, increasing the yield to 0.742%. The 30-year bond was weakening 22/32, raising the yield to 4.190%.

--Written by Melinda Peer and Sung Moss in New York

.

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