Stocks finished Thursday’s uneven trading session mixed, as less-than-stellar economic news pressured stock prices and upbeat corporate news, including Johnson & Johnson’s $25.4 billion deal to buy Guidant Corp., gave some investors reasons to buy.
While the market’s overall trend remains higher, according to analysts, many investors repositioned their portfolios in advance of Friday’s quadruple-witching day — the quarterly expiration of index futures and options, as well as individual stock futures and options, that tends to add volatility to the market.
Johnson & Johnson’s deal for Guidant, the latest in a spate of merger activity on Wall Street, gave a slight boost to blue chips, though the rest of the market moved slightly lower on a mix of data that shed little light on the economy’s direction.
Analysts remained confident that the economy and the market would advance, however.
“The fundamentals remain on solid footing and I suspect the year-end rally is going to continue,” said Peter Cardillo, chief strategist with S.W. Bach & Co. “Institutional investment adjustments will likely fuel the rally through the end of the year.”
The Dow Jones industrial average wavered in and out of positive ground throughout the session, closing with a gain of 14.19 points, or 0.1 percent, while the broader Standard & Poor’s 500-stock index slid 2.51 points, or 0.2 percent. The technology-laden Nasdaq composite index fell 16.40 points, or 0.8 percent.
The nation’s current account deficit — the broadest measure of trade — climbed to a record high of $164.7 billion in the third quarter of this year, reflecting robust demand for imported oil and foreign-made goods. Yet the news was considered good, as the latest snapshot of the country’s trade situation was lower than the $171 billion economists had expected.
Other economic news was mixed. New claims for jobless insurance fell to a five-month low last week, an encouraging sign of recovery in the labor market. But the number of housing projects to break new ground fell by 13.1 percent in November, the lowest level of activity since May. Economists had expected a smaller drop.
Oil prices remained steady a day after surging 6 percent on disappointing inventory data. Light, sweet crude for January delivery settled at $44.18 per barrel, down a penny, on the New York Mercantile Exchange.
Health care products bellwether Johnson & Johnson rose $2.55 to $63.45 after confirming a long-rumored plan to buy Guidant, one of the world’s top makers of cardiac devices, for about $25.4 billion in cash and stock. Guidant, a maker of pacemakers and cardiac defibrillators, lost 35 cents to $71.70 on the news.
At the Nasdaq, computer security giant Symantec Corp. sank $2.25 or 8.22 percent, to $25.13, after announcing a $13.5 billion deal to buy storage and backup program maker Veritas Software Corp. The merger is designed to create a one-stop shop for protecting against computer viruses and ensuring the reams of vital information stored on corporate networks remains accessible. Veritas shed 12 cents to $27.99.
“When companies are buying other companies, that’s a very bullish sign,” said Brian Williamson, an equity trader at The Boston Company Asset Management. “It shows confidence in the economy, and you get a trickle-down effect in speculation on other potential buyout targets in those sectors.”
Goldman Sachs Group Inc. was down $3.85 at $105.40, despite reporting a 23 percent rise in fourth quarter profits on increased transaction volume and a rise in mergers and acquisitions. But while per-share earnings beat Wall Street estimates by 4 cents, revenues of $4.6 billion came in just under the $4.8 billion projected by analysts.
Among decliners, government-sponsored mortgage provider Fannie Mae slid $1.39 to $69.30 after the Securities and Exchange Commission found it had violated accounting rules. The company is likely to restate earnings for four years.
Overseas, Japan’s Nikkei stock average shed 0.29 percent. In Europe, France’s CAC-40 gained 0.20 percent for the session, Britain’s FTSE 100 closed up 0.15 percent and Germany’s DAX index rose 0.48 percent.