Stocks in New York opened modestly lower, but then turned slightly positive as a mega merger between cholesterol-drug teammates Merck ( MRK) and Shering Plough ( SGP) was digested by investors.
Merck proposed a $41 billion cash-and-stock deal, offering Schering Plough shareholders 0.5767 of a Merck share and $10.50 in cash for each of their shares. Merck's shares were down 11% while Schering's surged 12% higher early Monday. The Dow Jones Industrial Average was up 46 points at 6673, and the S&P 500 rose 8 points to 692. The Nasdaq was rising 16 points to 1310. Last week, the Dow lost 6.2%, the S&P shed 7%, and the Nasdaq gave up 6.1%. But the Dow and S&P managed to end Friday's session in slightly positive territory, despite the highest unemployment rate since 1983. Data on retail sales and the trade deficit will be available later in the week. Not everyone is struggling under the tough economy, though. McDonald's ( MCD) posted a 1.4% rise in February sales at restaurants open at least 13 months, with help from strength in the U.S. Last week, Wal-Mart ( WMT) also had sales growth to report, and went against the grain by raising its dividend. Capital One ( COF) became the latest bank to cut its dividend on Monday. The company said that scaling back to 5 cents a share from 37.5 cents will preserve more than $500 million in capital annually. Wells Fargo ( WFC) cut its dividend on Friday, following other banks like PNC ( PNC), JP Morgan Chase ( JPM) and Bank of America ( BAC). In other banking news, Credit Suisse ( CS) nominated a new Chairman, Vice Chairman Hans-Ulrich Doerig, in light of Walter Kielholz moving to become the Chairman of Swiss Re.