Stocks Finish Mixed in Choppy Trade

NEW YORK ( TheStreet) -- Stocks finished near the flat line in a choppy trading session on Monday with Wall Street balancing a fresh round of M&A against another downgrade of Greece's credit rating.

The major U.S. equity indices are down for six consecutive weeks, the longest losing streak since late 2002, and week seven is off to a mixed start. The Dow Jones Industrial Average inched up 3 points, or 0.02%, to close at at 11,955. The S&P 500 settled up 1 point, or 0.10%, at 1272, while the Nasdaq Composite lost 4 points, or 0.16%, to 2639.

In the absence of new economic data, a slew of corporate mergers and acquisitions relieved some of the recent downside pressure, but Standard & Poor's decision to cut Greece's credit ratings by three notches kept the optimism in check.

The biggest deal of the day involved the insurance industry.

Allied World Assurance ( AWH) and Transatlantic Holdings ( TRH) agreed to merge in a $3.2 billion deal, forming an entity with total invested assets of $21 billion. Transatlantic's stock was adding 9.5% to $48.19 while Allied's stock dropped 4.5% to $55.44.

Global apparel company was VF Corp ( VFC) agreed to buy footwear company Timberland ( TBL) for around $2 billion, or $43 a share. Timberland shares soared 43.8% to $43.11, while VF's stock gained 10.0% at $101.01.

Shares of EMS Technologies ( ELMG) jumped 32.26% to $32.80 on news that the wireless communication equipment company agreed to be acquired by Honeywell International ( HON) for $491 million, or $33 a share. Honeywell's stock ended up 0.32% at $55.71.

Shares of Wendy's Arby's Group ( WEN) rose 0.9% to $4.56 on news that the company reached a deal to sell Arby's Restaurant Group for $430 million to a buyer formed by Roark Capital Group.

There was also a report that giant commodities trader Glencore is considering a 12-billion-pound ($19.5 billion) bid for Kazakh miner Eurasian Natural Resources, according U.K. newspaper The Sunday Times.

"Interest rates are low, companies still have a lot of cash and they're looking to grow, so acquisitions are a good strategy," said Peter Tuz, president at Chase Investment Counsel. The latest round of deals, he said, "gave the market a shot of good news this morning."

Despite the deal news, Tuz said there was still plenty of factors to keep investors cautious.

"Real estate is stuck at a level that doesn't give anyone confidence. There's uncertainty regarding growth and interest rates after the end of QE2, and economic data has been pretty weak lately. I think we're in a slowdown due to a very tepid growth rate, but there's no clear consensus regarding what's going to pull us out of this," he said.

In other news, Regions Financial's ( RF) board is looking into whether executives delayed public disclosure of loans that were going bad during the financial crisis, according to a Wall Street Journal report. The stock lost 1.5% to $6.05.

The energy sector showed the worst performance in Monday's session with Exxon Mobil ( XOM) and Chevron ( CVX) closing among the Dow's biggest laggards. Overall breadth within the blue-chip index was positive with 19 of the Dow's 30 components moving higher.

Healthcare stocks showed some of the strongest gains with Pfizer ( PFE) finishing at the top of the Dow, alongside Bank of America ( US) and JP Morgan Chase ( JPM).

Of the 3.7 billion shares that traded on the New York Stock Exchange, 47% advanced, while 51% declined. 1.8 billion shares changed hands on the Nasdaq.

The July crude oil contract shed 39 cents to trade at $96.91 a barrel. Gold for August delivery added 8 cents to trade at $1,516.40 an ounce.

The benchmark 10-year Treasury fell 3/32, pushing the yield to 2.984%. The dollar weakened slightly against the euro and yen, with the dollar index slipping 0.45%.


The FTSE in London rose 0.1% and the DAX in Frankfurt gained 0.2%. Japan's Nikkei lost 0.7% while Hong Kong's Hang Seng added 0.4%.

-- Written by Chao Deng and Melinda Peer in New York.

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