Stocks mixed ahead of earnings kickoff
NEW YORK » Wall Street started the week with a narrowly mixed performance yesterday, with many investors moving to the sidelines as they wait for quarterly profit reports.
Stocks had popped higher in earlier trading, extending last week's big advance on talk of a $5 billion private equity investment in Washington Mutual Inc. The nation's largest thrift is reportedly in discussions with buyout shop TPG Inc. and other investors about selling a stake in itself in return for cash. WaMu shares shot up $2.98, or 29 percent, to $13.15.
But with earnings on tap and the Federal Reserve issuing minutes from its March meeting today, investors, while clearly feeling more confident overall, decided to play it a little safer late in the day -- especially with Alcoa Inc. announcing its first-quarter results after the close.
Alcoa slid $1.56, or 4 percent, to $37.44 ahead of its earnings release. The aluminum company said it had a 54 percent drop in first-quarter net income, a sharper decline than the market expected. Its shares were little changed in after-hours trading yesterday.
The broader market started pulling back when the Standard & Poor's 500 index began approaching the levels where it stood before Wall Street's massive selloff in early March, noted Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
The Dow rose 3.01, or 0.02 percent, to 12,612.43, after rising more than 120 points earlier in the day and finishing last week up 393.02, or 3.22 percent.
Broader stock indicators were mixed yesterday. The S&P 500 index closed up 2.14, or 0.16 percent, at 1,372.54, after rising as high as 1,386.74. The Nasdaq composite index fell 6.15, or 0.26 percent, to 2,364.83. The Russell 2000 index of smaller companies fell 1.05, or 0.15 percent, to 712.68.
"Overall, I'm getting the sense here that the Street is starting to focus on fundamentals and the timing of a potential recovery in the economy, and trying to move past the credit crisis," said Craig Peckham, market strategist at Jefferies & Co.
Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange. Consolidated volume came to 3.66 billion shares, up from 3.59 billion on Friday.
Government bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 3.54 percent from 3.47 percent late Friday.
Light, sweet crude rose $2.70 to $108.93 a barrel on the New York Mercantile Exchange. Gold prices also increased, and the dollar gained against most other major currencies.
Swiss pharmaceutical maker Novartis AG said it will spend about $38 billion in a two-step bid for a majority stake in U.S. eye-care company Alcon Inc. Alcon rose $2.19 to $150.63, and Novartis fell $2.12, or 4 percent, to $50.
And Microsoft Corp. gave Yahoo Inc. a three-week deadline to agree to a takeover, or, Microsoft said, it would launch a proxy fight for control of the company. Yahoo fell 66 cents, or 2.3 percent, to $27.70, while Microsoft closed flat at $29.16. Yahoo said the deal isn't in the best interests of its shareholders, and called Microsoft's proxy threat counterproductive.