Session ends flat as investors weigh data

NEW YORK » Wall Street ended an erratic session essentially flat yesterday as investors grew anxious about upcoming first-quarter earnings and the possibility that interest rates won't be declining anytime soon. A $2 drop in oil prices lent support to the major indexes.

Takeover activity also provided some lift to the markets, with reports Dow Chemical Co. has been targeted by Middle Eastern investors and U.S. buyout firms in a deal that could be worth $50 billion. It would be the biggest leveraged buyout on the books.

The Dow Jones industrials rose 8.94, or 0.07 percent, to 12,569.14.

Broader stock indicators were mixed. The Standard & Poor's 500 index edged up 0.85, or 0.06 percent, to 1,444.61, and the Nasdaq composite index fell 2.16, or 0.09 percent, to 2,469.18.

The Russell 2000 index of smaller companies fell 1.71, or 0.21 percent, to 811.64.

Declining issues barely outpaced advancers on the New York Stock Exchange, where consolidated volume came to 2.32 billion shares compared with 2.31 billion shares traded Thursday. U.S. markets were closed Friday.

The U.S. Labor Department report showed nonfarm payrolls rose by 180,000 in March, above forecasts of 135,000. The unemployment rate fell to 4.4 percent, a five-month low.

"The positive influence of the jobs report, along with more M&A activity this morning, has been overshadowed by expectations that a rate cut is farther off in the distance," said Michael Sheldon, chief market strategist at Spencer Clarke.

The report caused the bond market to fall sharply during a shortened trading day on Friday. Bonds held steady from Friday's sell-off, with the yield on the benchmark 10-year Treasury note at 4.75 percent.

The dollar rose against other major currencies, while gold prices slipped.

Oil prices continued their steep decline, with a barrel of light sweet crude settling down $2.77 to $61.51 per barrel on the New York Mercantile Exchange. Tensions in the Middle East pushed crude higher in recent weeks, and eased after Iran released 15 British soldiers and marines.

Investors looked toward recent takeover activity as a sign that companies remain confident about the business climate.

Dow Chemical spiked $2.16, or 4.9 percent, to $46.63 after British tabloid The Sunday Express reported it could receive a buyout offer of $50 billion as soon as this week. Kohlberg Kravis Roberts & Co., one of the biggest U.S. private equity firms, is said to be among the bidders.

This would mark the biggest leveraged buyout, dwarfing recent deals like the $32 billion takeover of energy company TXU Corp. that was announced in February. That deal -- led by KKR and Texas Pacific Group -- will go down as the largest private equity deal to date if it is approved by regulators and shareholders.

Citigroup Inc. rose 1 cent to $51.58 after it announced the acquisition of Taiwan's Bank of Overseas Chinese to broaden operations in Asia, and particularly in the greater China region. The bank also said it will detail a long-expected cost-cutting plan tomorrow.