Wall Street declines as buyout deals fail
NEW YORK » Wall Street extended its losses yesterday as investors awaited a stream of key economic data this week and were left disappointed by the collapse of some closely watched acquisi- tion deals.
The markets, which pulled back last week amid concern about inflation's impact on interest rates, traded cautiously with Federal Reserve Chairman Ben Bernanke set to testify about the economy before Congress tomorrow.
Government data due Friday should shed light on wholesale inflation and the state of the housing market.
Unlike recent Mondays, there was a dearth of acquisition announcements to give the market a lift. Instead, investors had to deal with news that the Nasdaq Stock Market Inc. failed in its bid to buy the London Stock Exchange and that French drugmaker Sanofi-Aventis called off talks for a possible deal with Bristol-Myers Squibb Co.
Onyx Pharmaceuticals Inc. and Bayer AG advanced after the companies released data from a clinical trial that shows an experimental drug is effective in fighting liver cancer. Apple Inc. moved higher after being upgraded in anticipation of big product launches set this year.
Wall Street fell last week on concerns about higher oil prices and the possibility that inflation could lead to higher interest rates. With fourth-quarter earnings reports nearly over, investors have traded hesitantly as they wait for some kind of catalyst to give them direction.
"With all the data coming out, and Bernanke possibly taking a more hawkish tone, this causes the markets to be very cautious and tentative," said Alan Gayle, senior investment strategist for Trusco Capital Management.
The Dow Jones industrial average fell 28.28, or 0.22 percent, to 12,552.55.
Broader stock indicators declined. The Standard & Poor's 500 index was down 4.69, or 0.33 percent, at 1,433.37, and the Nasdaq composite index retreated 9.44, or 0.38 percent, to 2,450.38.
The Russell 2000 index of smaller companies was down 1.32, or 0.16 percent, at 805.79.
Advancing issues outpaced decliners by a 3 to 2 basis on the New York Stock Exchange, where volume came to 2.82 billion from 2.63 billion on Friday.
Bonds fell ahead of economic data due out this week, with the yield on the benchmark 10-year Treasury note up at 4.80 percent from Friday at 4.78 percent late Friday.
The dollar was mostly higher against other major currencies, while gold prices dropped.
Oil, which advanced last week as cold weather was seen increasing heating demand, fell on the New York Mercantile Exchange, with a barrel of light sweet crude closing at $57.81, down $2.08.