March 19, 2012 at 9:32 AM ET
U.S. stocks were struggling Monday, pulling back from nearly 4-year highs after cash-rich Apple said it will begin paying a dividend and buying back stock.
Apple Inc, the world's most valuable company, announced it will initiate a quarterly dividend of $2.65 and buy back up to $10 billion of its stock. Speculation heated up in recent weeks over how the iPad maker might use its $98 billion cash stockpile.
"It's a good story, the market was kind of expecting that. People were questioning what Apple could do with the money other than earn nothing," said Peter Kenny, managing director at Knight Capital In Jersey City, New Jersey.
Apple shares were lately 1.7 percent higher at $595.61.
The S&P 500 capped its fifth straight weekly gain with its best week in three months on Friday. The index has risen in seven of the past eight sessions for a 4.5 percent climb.
"We have to pull back somewhat. We have got to get a little closer to technical support, just in order for the trend to remain healthy, Kind of like pruning the tree, the market needs a little bit of a pruning," said Kenny.
United Parcel Service Inc gained 1.1 percent to $79.24 after the package delivery group said it will buy Dutch peer TNT Express, making UPS the market leader in Europe.
After the closing bell, Adobe Systems Inc is set to post quarterly results. The mean estimate of analysts surveyed by Thomson Reuters is for a profit of 57 cents a share for the software maker.
Dun & Bradstreet Corp, which provides commercial information on businesses, said local employees in China may have violated U.S. anti-bribery laws. It suspended operations at a local unit while it conducts an inquiry.
Broadcom Corp gained 1.9 percent to $38.53 after the chipmaker said it won a preliminary injunction against Emulex Corp in a patent infringement suit.
Reuters contributed to this report.