By Kristina Peterson
U.S. blue-chip stocks squeaked out a slim gain Monday amid
jitters ahead of U.S. midterm elections and expected moves from the
Federal Reserve.
The Dow Jones Industrial Average (DJI) rose 6.13 points, or
0.1%, to end at 11,124.62, after reversing an earlier triple-digit
climb.
Limiting the measure's losses, technology stocks rose after the
Semiconductor Industry Association said global chip sales rose 2.9%
in September from a month earlier. Intel Corp. (INTC) gained 2.6%,
while Hewlett-Packard Co. (HPQ) rose 1.1%.
Traders' focus was locked on events later this week, including
Tuesday's midterm elections and Wednesday's conclusion of a meeting
of the Federal Reserve's policy-making committee. The stock market
has rallied since early September on expectations that the Fed will
resume purchasing bonds in order to stimulate the economy.
Investors said they wouldn't be surprised to see a selloff after
the election and Fed meeting given the market's steady climb since
September amid a surge of market optimism.
"The market's been rallying almost straight up for a long, long
time," said Hank Camp, founder of HL Camp & Co, who predicted
the market would take a turn down next week. "It's way
overdone."
The market climbed earlier Monday, fueled by encouraging
manufacturing reports from the U.S. and China, as well as an
unexpected rise in U.S. construction spending.
The Nasdaq Composite (RIXF) closed down 2.57 points, or 0.10% to
2,504.84. The Standard & Poor's 500-share index (SPX) edged up
1.12 points, or 0.09% to 1,184.38.
The market's climb cooled when financial stocks slid into the
red after a ProPublica report said the U.S. Securities and Exchange
Commission is investigating whether J.P. Morgan Chase (JPM)allowed
Magnetar Capital, a hedge fund, to improperly select assets for a
$1.1 billion deal backed by subprime mortgages. J.P. Morgan shed
0.6%, while other financials tumbled.
Utilities also lagged. NextEra Energy (NEE) fell 2% after the
company said it expects the year's profit will come in "the lower
half" of its prior forecast.
Baker Hughes (BHI) climbed 4.2%.
Ambac Financial Group (ABK) tumbled 50% to 41 cents, after the
bond insurer warned that its board declined to make an interest
payment and said it is negotiating plans for a prepackaged
bankruptcy proceeding with senior debtholders. If it can't reach an
agreement for such a plan, it plans to file for Chapter 11
bankruptcy protection by the end of the year.
EXCO Resources (XCO) jumped 30% after Chairman and Chief
Executive Douglas Miller offered to buy the company, valuing it at
about $4.4 billion. The company's board said it intends to
establish a special committee of independent directors to consider
the proposal.
The company's board said it intends to establish a special
committee of independent directors to consider the proposal.
Wilmington Trust (WL) sank 41% to $4.21 after the bank announced
a merger with M&T Bank (MTB) for a stock deal valued at about
$351 million. The Delaware banker also reported its third-quarter
loss widened sharply as its loan-loss provisions soared and as its
mounting losses required it to establish a "significant"
tax-valuation allowance. Shares of M&T Bank gained 3.6%.
Fortinet (FTNT) shares rose 6.3% after the company disputed a
Bloomberg News report from late Friday that International Business
Machines (IBM) has approached the network-security systems maker
about a possible takeover. The company said on Monday it isn't in
acquisition talks with IBM.
Trucking company YRC Worldwide (YRCW) rose 6.1% after members of
the Teamsters union voted in favor of ratifying the continuation of
concessions wage and pension reductions, along with new work rules
that J.P. Morgan Chase says gives YRC additional flexibility.
The U.S. dollar (DXY) strengthened against both the euro and the
yen. The euro fell to $1.3892, down from $1.3947 late Friday in New
York. and
Demand for Treasurys slipped, pushing the 10-year note's yield
(UST10Y) up to 2.62%. Crude-oil prices slipped below $83 a barrel,
while gold futures also declined.