New York – Stocks closed lower for the second straight session Monday after the Dow Jones industrial average flirted briefly early in the day with a record-high close.
After also making an attempt to reach its record trading high of 11,750.28 set in January 2000, the Dow slipped 8.72, or 0.07 percent, to 11,670.35. Broader indexes were also lower.
On Thursday, and again Monday, the Dow rose above its highest-ever closing level of 11,722.98 before retreating. But trading was volatile as some market players were out for the Yom Kippur holiday; traders said that may have weighed on stocks.
The markets mostly shrugged off the day’s economic data, which presented a mixed picture of the economy. And stocks were helped, at least initially, by falling oil prices. A barrel of light crude settled at $61.03, down $1.88, on the New York Mercantile Exchange.
Oil prices have fallen more than 20 percent since July, helping drive gains in stocks in the third quarter.
“There are a lot of crosscurrents between earnings, the overall condition of the economy and oil prices,” Jim Herrick, head of equity trading at Robert W. Baird & Co., said of the market’s pullback Monday.
Despite the Dow’s recent climb to near-record territory, Herrick believes the markets will stay tethered near current levels as investors wait for more economic data, such as the government’s employment report due Friday, as well as a read on corporate earnings and profit forecasts.
Jon Brorson, head of growth equities at Lehman Brothers Asset Management, points out that the start of a new quarter often brings activity from investors seeking to rebalance their portfolios, though he noted volume was light because of the holiday.
The Standard & Poor’s 500 index fell 4.53, or 0.34 percent, to 1,331.59, and the Nasdaq composite index slid 20.83, or 0.92 percent, to 2,237.60.
The Institute for Supply Management said the manufacturing sector grew at the slowest pace in more than a year in September amid weaker U.S. auto sales and a cooling of the housing market.
Meanwhile, the Commerce Department said construction spending in August rose 0.3 percent after falling 1 percent in July. Also weighing in, the National Association of Retailers said pending home sales rose 4.3 percent in August.
The Standard & Poor’s 500 index fell 4.53, or 0.34 percent, to 1,331.59, and the Nasdaq composite index slid 20.83, or 0.92 percent, to 2,237.60.
The economic data follow the strongest quarter for the stock market in about a decade. Investors are eager to find out whether the Federal Reserve still sees inflation as a sizable threat.
Stocks have risen since the central bank interrupted a two-year string of 17 straight rate hikes and last month left rates unchanged for a second straight time.
In corporate news, casino operator Harrah’s Entertainment Inc.
received a $15.05 billion offer for the company from private equity firms Apollo Management and Texas Pacific Group. The private-equity firms will pay $81 per share, a 22 percent premium to Harrah’s closing stock price on Friday on the New York Stock Exchange.
Harrah’s was up $9.25, or 13.92 percent, at $75.68.
Biopharmaceutical concern Myogen Inc. jumped $16.36, or 47 percent, to $51.44 after drug research company Gilead Sciences Inc.
said it would acquire the company for $2.5 billion, a 50 percent premium. As is often the case with the company doing the acquiring in a merger deal, Gilead was down, falling $4.49, or 6.53 percent, to $64.28.
Apple Computer Inc. fell $2.12, or 2.75 percent, to $74.86 after Citigroup cut its rating on the computer maker to “Hold” from “Buy,” noting that Apple is unlikely to introduce a video iPod with a larger screen and other enhancements before the holidays.
The iPods announced last month are likely to comprise the company’s holiday offerings, the analyst contends.
Wal-Mart Stores Inc. fell 88 cents to $48.44, after it reported that September sales at stores open at least a year rose 1.8 percent. The world’s largest retailer had expected such sales, a closely tracked measure of retail performance, would increase 1 percent to 3 percent.
I-Flow Corp. rose $1.22, or 10.15 percent, to $13.24 after announcing it agreed to sell its InfuSystem Inc. subsidiary to HAPC Inc. for $140 million in cash and a secured note. InfuSystem rents infusion pumps and related products to medical oncologists. The cash portion of the purchase price will likely total $65 million to $85 million, the company said.
Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.61 percent from 4.63 percent late Friday. The dollar was mixed against other major currencies, while gold prices fell.
Declining issues outnumbered advancers by roughly 3 to 2 on the New York Stock Exchange, where volume came to 1.35 billion shares, compared with 1.47 billion traded at the same point Friday. Volume was light Monday as a result of the holiday.
The Russell 2000 index of smaller companies was down 6.78, or 0.93 percent, at 718.81.
Overseas, Japan’s Nikkei stock average closed up 0.79 percent.
Britain’s FTSE 100 closed down 0.05 percent, Germany’s DAX index was down 0.08 percent, and France’s CAC-40 was down 0.13 percent.
— On the Net: New York Stock Exchange: Nasdaq Stock Market: AP-WS-10-02-06 1721EDT
