By Leslie Wines, MarketWatch
Last Updated: 4:21 PM ET Dec 21, 2005
NEW YORK (MarketWatch) -- U.S. stocks closed off their highs Wednesday,
repeating a recent trend, although the market drew some support from a string
of new merger deals that included Seagate Technology's $1.9 billion
acquisition of its rival Maxtor Corp.
The Dow Jones Industrial Average closed up 28.18 points at 10,833.73.
Earlier the Dow touched 10,900, a level that often spooks the market.
The S&P 500 rose 3.17 points to 1,262.79 and the Nasdaq Composite gained
9.24 points to finish at 2,231.66.
There were more than 1.51 billion shares traded on the New York Stock
Exchange, where rising shares outnumbered decliners by 21 to 12. More than
1.66 billion stocks traded in the Nasdaq market, with 18 advancing stocks for
every 11 stocks that ended lower.
Art Hogan, chief market strategist at Jefferies & Co., said vigorous gains
seen in morning trade faded as the session drew to a close because "There
hasn't been a real catalyst to drive the market higher."
"This is more of a technically-driven rally," Hogan said. "If the news is
positive for the rest of the week, we should trend higher, but not enough to
set any new record highs."
Despite the fact that attempts at strong rallies have been squashed every
trading day this week, some analysts think the market could yet stage a
revival of the year-end rally seen in November.
Michael Metz, chief investment strategist at Oppenheimer & Co., said, "I
think there are some buyers in the wings. There's no real news behind today's
gains. People took some money out of the market earlier in the month. Now they
are ready to go back in."
The Commerce Department reported that the gross domestic product increased
at a 4.1% rate in the third quarter, slightly lower than previous estimates of
a 4.3% growth rate.
Economists surveyed by MarketWatch had expected growth of 4.3%. Crude
futures were volatile after news from the Energy Department of a 1.3 million
barrels increase in inventories in the latest week. Given cold weather on the
east coast, investors may be paying closer attention to heating oil stocks,
which fell 2.8 million barrels in the latest week.
The February crude contract threw off morning weakness to close up 47
cents at $58.56 a barrel.
Gold futures closed at a one-month low, below the key psychological level
of $500 an ounce. The February contract dropped $1.70 to $495.30 an ounce,
pressured by late-year portfolio adjustments.
The Treasury market ended lower, sending yields higher, despite the weaker
GDP revision. The GDP report's core personal consumption deflator, which is
carefully monitored by the bond market, was boosted to 1.4% from 1.2%
annualized.
The benchmark 10-year Treasury note finished down 5/32 at 100-5/32 with a
yield of 4.48%.
The dollar benefited from the indication of increased inflation in the new
GDP report, which bolstered expectations for continued rate hikes.
The dollar rose 0.2% to 117.30 yen as the euro fell 0.03% to $1.1835 in
late trade.
Stocks in play
Allergan agreed to pay more than $3 billion for Inamed, sealing a deal
that topped Medicis Pharmaceutical's earlier bid.
Inamed stock closed 1.1% higher at $86.90.
Seagate Technology will pay $1.9 billion for Maxtor Corp. Both companies
make hard disks.
Seagate stock reversed morning losses to close up 3.2% at $20.23 while
Maxtor stock catapulted 53.3% higher to $6.93.
Palm Inc. shot up 3.2% to $31.90. Late Tuesday the company reported
quarterly earnings that topped expectations and an 18% increase in sales.
International Business Machines, a Dow component, will buy Micromuse for
$865 million in cash.
Micromuse stock vaulted 36.9% to close at $9.86 as IBM shares rose 64
cents to $83.12.
Elsewhere on the Dow, embattled General Motors extended its recent slide,
falling 4% to $19.05. Investor Kirk Kerkorian's Tracinda Corp. disclosed in an
SEC filing that it reduced its stake in the automaker to 7.8% from 9.9% by
selling 12 million shares over the past few days.
According to Thomson data, GM stock hit a daily low of $17.08 on Oct. 4,
1982. If the stock on Thursday falls below that level, it would be the weakest
price since August of the same year, when the daily low bounced between $14.64
and $17.68.
DuPont, also in the Dow, gained 2% to close at $42.80 after a positive
analyst note.
Google stock gave up early gains to close lower after the company sealed a
deal to pay $1 billion for a 5% stake in the America Online division of
Time Warner.
FedEx. Corp. rose 5.3% to $103.70, after the package-delivery company
turned in earnings that exceeded analysts' expectations.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
daily; Pre-Open ( 9:00 a.m.), Post-Open (10:15 a.m.), and Close (5:00 p.m.).
The information herein is believed to be true and accurate. We take no
responsibility for inaccurate information and reserve the right to update our
reports. If you have any questions please e-mail James Sang at
james.sang@tfn.com or call 646.822.6233. For more information about Thomson
Financial visit us on-line at http://www.thomsonfinancial.com. For more
financial information at your fingertips, please visit
http://www.irchannel.com.
SOURCE Thomson Financial Corporate Group
back to top
