Dec. 12 -- U.S. stocks traded mixed Monday as a legal setback for Merck
and a looming Federal Reserve meeting drew some attention away from a flurry
of corporate deals.
The Dow Jones Industrial Average was down 10.81 points at 10767.77.
The Nasdaq Composite Index gained 4.22 points to 2260.95 while the S&P 500
Index rose 1.06 points to 1260.43.
Dow component Merck was lower after a judge declared a mistrial in a
federal liability case involving its recalled painkiller Vioxx.
Leading Monday's M&A developments was a report of a possible $30 billion
ConocoPhillips buyout of Burlington Resources. Viacom's Paramount arm,
meanwhile, bested rival bidder NBC Universal and secured a deal to buy
most of DreamWorks SKG.
Interest rates factored in trading as well. Expectations among some
investors that the Federal Reserve may signal an end to its cycle of hikes
at its policy-setting meeting Tuesday underpinned the broader market.
The Federal Reserve's interest-rate-setting panel is widely expected to
raise its key short-term rate by a quarter percentage point to 4.25%. It
would be the 13th straight rate hike since the Fed began lifting rates
from a four-decade-low 1% in June 2004.
Honeywell International Inc. lifted its quarterly dividend by 10%.
Wal-Mart Stores Inc. reiterated that it expects same-store sales to rise
between 2% and 4% in December.
Morgan Stanley upgraded United Technologies to overweight from equal
weight, saying the conglomerate isn't getting the recognition it deserves
for the aerospace cycle.
Dollar, gold, oil, bonds
Gold futures surged - gaining for an eighth consecutive session - amid
fresh reports of investment-fund demand in Asia and the Middle East.
Crude-oil futures edged higher in early trading after the Organization of
Petroleum Exporting Countries said it would leave unchanged its output
quota at 28 million barrels of oil a day, but warned it may tighten the
spigot at a special meeting in January if demand falls too much.
An explosion at British oil-storage depot over the weekend also
underpinned gains. Crude for January delivery tapped $60.50 a barrel on
the New York Mercantile Exchange. It was last at $60.25, up 86 cents, or
1.5%.
Bonds were lower ahead of Tuesday's Federal Reserve decision on rates. The
benchmark 10-year note was yielding 4.55%.
ConocoPhillips eyes Burlington Resources
ConocoPhillips is negotiating to buy oil and gas producer Burlington
Resources Inc. for more than $30 billion according to The Wall Street
Journal.
Also on the deal front, Viacom Inc.'s Paramount Pictures agreed to buy
DreamWorks SKG for $1.6 billion, thwarting rival NBC Universal's
five-month long courtship to acquire the independent movie studio.
Tommy Hilfiger Corp. has received takeover interest from three groups, The
Wall Street Journal also reported.
Credit Suisse First Boston lifted its price target to $475 from $400 for
Google, saying momentum behind the online advertising market is
accelerating.
The Internet search company may also be lifted by news that it will join
the Nasdaq 100 index when the closely followed technology benchmark is
rebalanced this month.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
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SOURCE Thomson Financial Corporate Group
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