Investors cash in on Monday’s gains
NEW YORK » Wall Street ended mixed yesterday, selling off large companies' stocks but buying up those of smaller companies, as investors cashed in gains from yesterday's big rally and poked around for new bargains.
Wall Street was only slightly fazed by the National Association of Realtors' report yesterday that its seasonally adjusted index of pending sales for existing homes fell 6.5 percent in August from July and 21.5 percent from a year ago.
Optimism about another rate cut at the Fed's Oct. 30-31 meeting drove the Dow up nearly 192 points Monday to close at 14,087.55 -- a new high and its first foray above the 14,000 level since mid-July, right before stocks plunged on worries related to subprime mortgages and overly leveraged debt.
"The economy is soft, you have this big run-up, and the fact is people are just taking some profit," said Scott Fullman, director of investment strategy for I. A. Englander & Co.
The Dow fell 40.24, or 0.29 percent, to 14,047.31.
The broader Standard & Poor's 500 index fell 0.41, or 0.03 percent, to 1,546.63, while the tech-dominated Nasdaq rose 6.12, or 0.22 percent, to 2,747.11.
The Russell 2000 index of smaller companies rose 7.23, or 0.88 percent, to 831.97.
Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, where volume came to 1.27 billion shares.
Government bond prices rose as the Dow pulled back. The 10-year Treasury note yield, which moves inversely to its price, fell to 4.53 percent from 4.56 percent late Monday.
The dollar rebounded from record lows versus the euro, and also recovered some ground against the pound and the Canadian dollar. Gold, which has recently hit multi-decade highs, tumbled under pressure from the rising dollar; an ounce of gold fell $17.80 to $736.30 on the New York Mercantile Exchange.
Crude oil futures on the Nymex also declined, slipping 19 cents to $80.05 a barrel. Many analysts say oil's September rally to record levels above $83 a barrel was due to speculative buying by investors taking advantage of the weak dollar. A stronger dollar makes commodities more costly to foreign buyers.
General Motors Corp. was the biggest gainer among the 30 Dow components, rising $1, or 2.8 percent, to $37.05 after reporting that its September U.S. sales rose slightly.
But Ford Motor Co.'s U.S. sales plummeted 21 percent in September on deep cuts in sales to car rental agencies. Still, its stock rose 34 cents, or 4.1 percent, to $8.57, on an anticipated new contract with union workers.
In other corporate news, a group of investors reduced its cash offer for SLM Corp., known as Sallie Mae, by 17 percent, and SLM insisted that the buyers honor their original $25 billion deal. SLM rose 19 cents to $50.09.
Canada-based TD Bank Financial Group agreed to buy Commerce Bancorp Inc. in a cash-and-stock deal valued at $8.5 billion.
The news got a lukewarm reception: Commerce fell 35 cents to $39.47, and Toronto Dominion fell $4.29, or 5.6 percent, to$72.65.