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Stocks slip despite
fresh acquisitions
NEW YORK >> Another lackluster trading session sent stocks lower yesterday despite a wave of corporate deals that underscored the economy's overall health. Technology issues led the selling as investors moved to less risky stocks.
Investors appeared focused on the lingering disappointment over the country's slow job growth, even though a fresh wave of acquisitions showed corporate America was still betting on a growing economy. The government on Friday reported that the nation's payrolls grew by just 21,000 in February, leaving the unemployment rate stuck at 5.6 percent.
"If nothing else the jobs figure shows that companies are keeping costs down, and that'll help earnings," said Peter Dunay, chief market strategist at Wall Street Access. "At least in the near-term, corporate profitability will be a key driver in this market."
The Dow Jones industrial average lost 66.07, or 0.6 percent, to 10,529.48, hitting its lowest level since Feb. 5.
Broader stock indicators also fell. The Standard & Poor's 500 index dropped 9.66, or 0.8 percent, to 1,147.21, and the Nasdaq composite index was down 38.85, or 1.9 percent, at 2,008.78.
The price of the Treasury's 10-year note closed up58 point, while its yield fell to 3.77 percent from 3.85 percent Friday. Two-year Treasury notes were up332 point and yielded 1.48 percent, down from 1.57 percent Friday.
Some investors may have felt that tech stocks, which drove the 2003 rally, were overvalued, especially with mixed outlooks on 2004 sales, analysts said. That moved investors to more defensive positions in large-cap, blue chip stocks.
"What you're seeing here is a move out of technology, led by semiconductors, and into defensive stocks," said Michael Sheldon, chief market strategist at Spencer Clarke LLC. "There's nothing else pushing the market right now. We've run out of gas."
BellSouth Corp. announced it would sell its stake in 10 Latin American wireless operations to Spain's Telefonica SA for $4.2 billion in cash and $1.5 billion in assumed debt. The deal will help BellSouth as Cingular Wireless, a joint venture with SBC Communications Inc., prepares its $41 billion acquisition of AT&T Wireless Services Inc.
BellSouth shed 4 cents to $28.80, AT&T Wireless was down 12 cents at $13.44 and SBC rose 13 cents to $25.15.
J.M. Smucker Co., which makes Smucker's jam and Jif peanut butter, fell $2.61 to $49.32 after it announced it would acquire International Multifoods Corp. and its popular Pillsbury products for $500 million in cash and stock. International Multifoods jumped $5.07, or 26 percent, to $24.70.
Eastman Kodak Co. dropped 96 cents to $26.83. The company said it will buy two product lines from a German manufacturer.
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