Impending Fed data gives market pause
NEW YORK » Wall Street eked out a modest gain yesterday as investors, wary about the upcoming release of the Federal Reserve minutes, bought cautiously amid a series of new takeover deals and upbeat consumer confidence figures.
Stocks drew support from news that a consortium of banks led by Royal Bank of Scotland PLC said it will bid 71.1 billion euros, or $95.5 billion, for the Netherlands' ABN Amro, besting an offer from Barclays PLC. Other takeover news included an announcement that Tishman Speyer Properties and Lehman Brothers Holdings Inc. are buying Archstone-Smith Trust for at least $13.5 billion.
"It's a bit of a wishy-washy day ... people are starting to get their sea legs back after a long weekend," said Joe Ranieri, managing director in equity trading at Canaccord Adams.
The Dow Jones industrial average rose 14.06, or 0.10 percent, to 13,521.34.
The Standard & Poor's 500 index rose 2.38, or 0.16 percent, to 1,518.11, while the Nasdaq composite index gained 14.87, or 0.58 percent, to 2,572.06.
Advancing issues outnumbered decliners by almost 2 to 1 on the New York Stock Exchange, where volume came to 1.41 billion shares.
The Russell 2000 index of smaller companies was up 7.60, or 0.92 percent, at 837.53.
The dollar slipped against other major currencies, and gold prices climbed.
Bonds fell after the consumer confidence data, with the yield on the benchmark 10-year Treasury note rising to 4.89 percent from 4.86 percent late Friday. Yields have remained higher in recent sessions as fixed-income investors bet the Fed won't lower rates in the near future.
Yesterday, the consumer appeared strong; the Conference Board said its Consumer Confidence Index rose to 108.0 in May, up from a revised 106.3 in April and above the average analyst estimate. Also, the Dallas and Chicago Federal Reserves both reported expansions in regional manufacturing activity.
"The rise in consumer confidence during the month is really quite impressive in the face of the record highs in gasoline prices," said Georges Yared, chief investment strategist for Yared Investment Research.
But the Standard & Poor's housing index indicated that U.S. home prices declined 1.4 percent in the first quarter compared to a year ago, the first time since 1991 that prices posted a quarterly drop.
U.S. retail gasoline prices have eased slightly from their record high of $3.227 a gallon, on average, to $3.201 yesterday, according to AAA. Crude oil futures plunged $2.05 to $63.15 a barrel on the New York Mercantile Exchange.
In response, Exxon Mobil Corp. fell 89 cents to $82.62.
After it was reported that Archstone was being bought, the stock rose $6.19, or 11 percent, to $61.42.
Engineering and construction company URS Corp. said it will buy competitor Washington Group International for $2.6 billion. Washington Group rose $15.07, or 21.5 percent, to $85.04, and URS rose $2.38, or 5.1 percent, to $49.27.
The technology sector got a boost yesterday after Vodafone Group PLC said it narrowed its full-year loss. U.S. shares of the mobile phone company rose $1.14, or 3.7 percent, to $31.70.