Following a lower open, U.S. stocks were trading erratically Monday, as has been the story for weeks, as the prospect of a global recession continued to loom.
The Dow Jones Industrial Average was lately trading around the flat line. Recently, the blue-chip average was down 11 points at 8368. The S&P 500 was lower by 8 points at 869, and the Nasdaq was losing 17 points at 1535.
As the new week began, financial firms, major players in the global crisis, were in focus. The Financial Times Web site reported that Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report chief Lloyd Blankfein approached Citigroup (C) - Get Citigroup Inc. Report head Vikram Pandit about a merger. Pandit turned down the proposal, which was made in September, the report said.
Elsewhere on the merger front, CenturyTel (CTL) - Get CenturyLink, Inc. Report reached an agreement to acquire Embarq (EQ) - Get Equillium, Inc. Report in a stock swap the companies are valuing at around $11.6 billion.
Also, as the Treasury's $700 billion Troubled Asset Relief Program to buy equity stakes in troubled banks got underway, several companies announced their participation in the initiative. Among them, KeyCorp (KEY) - Get KeyCorp (KEY) Report and Huntington Bancshares (HBAN) - Get Huntington Bancshares Incorporated (HBAN) Report announced they would take part in the Treasury Department's plan to buy stock in banks facing liquidity troubles.
The Federal Reserve was also working to shore up short-term debt markets and get companies to lend to one another. The Fed said it will give companies a rate of 1.88% for three-month, high-grade commercial paper and buy asset-backed debt for 3.88%. Three-month dollar Libor, a measure of the rate banks charge one another for large loans, ticked down to 3.51% from 3.52% Friday. The overnight Libor rate was at 1.27%.
Amid speculation that there will be additional interest-rate cuts, European Central Bank chief Jean-Claude Trichet said his agency may cut rates at its Nov. 6 meeting. Expectations of a rate cut from the U.S. Fed increased ahead of its two-day meeting, which begins Tuesday.
Also making headlines was conglomerate Loews Corp. (L) - Get Loews Corporation (L) Report , which said it will buy $1.25 billion of preferred stock in insurer CNA Financial (CNA) - Get CNA Financial Corporation Report . Loews owns a 90% stake in CNA, which swung to a third-quarter loss because of a downturn in its investment portfolio and hurricane-related claims.
The state of the U.S. automakers was once again looking precarious. Bloomberg reported that General Motors (GM) - Get General Motors Company (GM) Report requested support from the Treasury Department to help it merge with Chrysler.
Looking at the day's economic data, the Census Bureau released its September new-home sales figures. The agency reported that September sales came in at an annual rate of 464,000, up from 460,000 in August. Economists were anticipating 450,000 units sold. Inventories, meanwhile, declined to 394,000 from 425,000. However, sales of new houses declined year over year, and home prices hit a four-year low.
In the realm of commodities, crude oil was losing $1.18 to $62.97 a barrel. Gold was gaining $1.10 to $731.40 an ounce.
Longer-dated U.S. Treasury securities were gaining ground. The 10-year was up 6/32 to yield 3.66%, and the 30-year was gaining 1-8/32, yielding 4%.
The dollar was continuing the wild swings seen at the end of last week, making big gains against the euro and pound but taking sharp losses vs. the yen. The euro was down 1.5% to $1.24, and the pound was plummeting 2.6% to $1.54. Against the yen, the dollar was sliding 1.1%.
Abroad, European exchanges, including the FTSE in London and the DAX in Frankfurt, were taking heavy losses. Asian markets, such as Japan's Nikkei and Hong Kong's Hang Seng, closed on the downside.