Wall Street finished a quiet Monday with a small advance, despite lower oil prices and several mergers and acquisitions, including Wm. Wrigley Jr. Co.’s $1.5 billion bid for several candy brands from Kraft Foods Inc.
The pullback in energy prices and pickup in M&A activity were encouraging to analysts, who were not distressed by the day’s lackluster trading. After three solid weeks of gains, and in the absence of any new economic data, it’s natural for investors to take a step back.
“People are trying to figure out what’s next for the market,” said Dean Junkans, chief investment officer for Wells Fargo Private Client Services. “We’ve had a nice run, post-election ... I think people are looking for that yearend rally, and wondering whether we’ve already gotten a bunch of it of if we’ve got more to run. I think we’ve got more to run.”
The Dow Jones industrial average was up 11.23 points, or 0.1 percent, at the close of trading, after last week’s gain of 1.5 percent. The broader Standard & Poor’s 500-stock index finished down 0.36 point, or 0.03 percent, following a 1.54 percent rise last week. The Nasdaq composite added 8.75 points, or 0.4 percent, after a weekly gain of 2.3 percent.
Crude oil prices dropped, continuing a three-week trend that has taken crude futures down from their record $55-per-barrel level. Light, sweet crude for December delivery fell 52 cents to $46.87 in trading on the New York Mercantile Exchange.
Investors were also weighing the resignations of four members of President Bush’s cabinet following the election, including Secretary of State Colin Powell and Energy Secretary Spencer Abraham. Including the latest resignations, six members of the president’s 15-member Cabinet have announced plans to step down for his second term.
The day’s news seemed to have little impact on trading, as institutional investors focused on technical levels after equities jumped 8 percent over the last three weeks. Still analysts noted that the market is entering a seasonally strong period, which may help keep stocks aloft through the end of the year.
“We’re due to kind of settle in on a short-term basis,” said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn. “Three weeks ago we were at the lower end of the move over the past year and now we’re at the upper end. So we’ve completed the lows to the highs in a matter of three weeks. But historically it’s a lot easier to get a market going this time of year.”
General Electric Co. fell 15 cents to $36.10 after announcing plans to buy SPX Corp.’s Edwards Systems Technology fire-and-security unit for nearly $1.4 billion in an all-cash deal, both companies said Monday. SPX Corp. rose $1.22, or 2.8 percent, to $44.21, on the news.
Wrigley added 72 cents to $68.08 after the candy and gum maker announced an agreement to buy several brands, including Life Savers and Altoids, from Kraft for $1.48 billion. Kraft declined 20 cents to $34.68.
Dow Jones & Co., publisher of The Wall Street Journal, added 10 cents to $45.10 after announcing plans to buy MarketWatch Inc. for about $519 million in a deal that would end a month-long bidding war for the online financial news and information provider. MarketWatch, which operates two Web sites, CBS.MarketWatch.com and BigCharts.com, closed up $1.33, or 7.9 percent, at $18.12.
Lowe’s Cos. Inc. was down $1.00, or 1.7 percent, at $59.25, despite reporting a 15.5 percent rise in third-quarter earnings, beating Wall Street expectations by 6 cents a share. The nation’s second-largest home improvement chain also reiterated its forecast, which may have disappointed investors who were expecting a boost.
Microsoft Corp. was up 42 cents at $27.39 as Wall Street adjusted its price to reflect the company’s special $3 dividend, payable Dec. 3. While the stock has gone up since the dividend was announced in July, the company still faces questions about profit growth and a dearth of large software launches in the coming year.
Overseas, Japan’s Nikkei average surged 1.88 percent. In Europe, France’s CAC-40 lost 0.37 percent, Britain’s FTSE 100 added 0.19 percent and Germany’s DAX declined 0.22 percent.