New York – Stocks ended a lethargic session moderately lower Monday as a lack of economic news returned investors’ focus to interest rates and inflation ahead of comments from new Federal Reserve Chairman Ben Bernanke later this week.
Reports that Merrill Lynch & Co. is in talks to buy nearly half of investment-management firm BlackRock Inc. drew a positive reaction from the market, but an article warning of intensifying competition for Google Inc. undermined the tech sector and sent the Nasdaq sliding about 1 percent.
Trading was quiet while investors anticipated Bernanke’s first testimony before Congress on Wednesday, said Jack Ablin, chief investment officer for Harris Private Bank. Many thought January’s interest-rate hike would be the last for a while, but recent signs of economic growth have renewed debate over whether the Fed will go further to stifle inflation, Ablin said.
“Right now, the transparency we had with (former Chairman Alan) Greenspan is gone,” Ablin said, adding that a strong first- quarter gross-domestic-product figure would likely guarantee another rate increase at the Fed’s May meeting.
At the close of trading, the Dow Jones industrial average declined 26.73, or 0.24 percent, to 10,892.32.
The broader stock indicators also moved lower, with the Nasdaq dropping 22.07, or 0.98 percent, to 2,239.81. The Standard & Poor’s 500 index lost 4.13, or 0.33 percent, to 1,262.86.
Bonds were flat, although the yield curve remained inverted, with the 10-year Treasury note yield unchanged at 4.58 percent and the two-year Treasury yield down slightly at 4.67 percent. The inversion signals a lack of short-term confidence and has preceded economic recessions six of seven times in the past, Ablin said.
The dollar was mixed against most major currencies, and gold prices plunged.
Energy prices slumped despite a heavy weekend snowstorm that blanketed the Northeast, a major consumer of heating oil.
