Stocks finished Wednesday slightly lower amid a pair of big acquisitions, as a new batch of positive earnings eased investors’ concerns about corporate profits.
The Walt Disney Co.’s long-awaited acquisition of animation studio Pixar, along with Boston Scientific Corp.’s winning bid for Guidant Corp., were welcome news on Wall Street, while strong profits at Xerox Corp. and others helped overcome last week’s disappointing earnings.
In economic news, sales of existing homes set a record for a fifth straight year in 2005 even though the year ended on a weaker note with three straight monthly declines, sending a strong signal that the nation’s housing boom is beginning to cool.
The National Association of Realtors reported that sales of previously owned homes and condominiums dropped by 5.7 percent in December compared to the sales pace in November. It marked the third consecutive monthly decline, something that has not occurred in more than three years.
At the session’s close the Dow Jones industrial average was off 2.48 points, or 0.02 percent, while the broader Standard & Poor’s 500-stock index lost 2.18 points, or 0.17 percent. The Nasdaq composite index, full of technology stocks, finished the day down 4.60 points, or 0.20 percent.
Crude oil futures, still unusually high for this time of year, fell $1.21 a barrel to settle at $65.85 in trading on the New York Mercantile Exchange.
Mergers news and earnings drove trading. Disney fell 55 cents to $25.44 after agreeing to acquire Pixar for $7.4 billion in stock. The deal will make Steve Jobs, Pixar’s chief executive, the single largest shareholder of Disney stock, and he will have a seat on Disney’s board. Pixar climbed 45 cents to $58.02.
Jobs’ other company, Apple Computer Inc., fell $1.84 to $74.20. Though Apple had no part of the deal, investors felt Jobs’ new ties to Disney could benefit Apple through increased distribution of Disney content for Apple’s iTunes service.
Boston Scientific slipped 46 cents to $23.54 after winning the battle for medical device maker Guidant Corp. with a $27.2 billion cash-and-stock deal that trumped a lower bid by Johnson & Johnson. Guidant fell $1.59 to $75.19, while Johnson & Johnson fell 86 cents to $58.50.
In earnings news, Xerox Corp. reported an 18 percent jump in fourth-quarter profits on strong sales of its color imaging products as well as cost cutting measures. The company also approved a $500 million stock buyback program. Xerox fell 15 cents to $14.31.
Drugmaker Bristol Myers Squibb Co. rose 64 cents to $21.97 after its quarterly profit beat Wall Street expectations by 3 cents per share despite slipping sales due to generic competition on a growing number of products.
Overseas, Japan’s Nikkei stock average rose 0.01 percent. In Europe, Britain’s FTSE 100 was up 1.25 percent, Germany’s DAX index surged 1.74 percent and France’s CAC-40 gained 0.90 percent.