Market Wrap-Up
Stocks and many exchange-traded funds staged a late-afternoon turnaround Monday as the falling euro and ongoing concern over the European continent’s debt crisis sparred for investor attention with a surge in merger activity.
The Dow Jones Industrial Average gained 6 points to 10626 after a midday plunge of 180 points. The S&P 500 picked up a point to close at 1137 and the Nasdaq gained 7 points to close at 2354.
The Federal Reserve Bank of New York’s Empire Manufacturing survey showed business conditions improved for manufacturers in the area for the 10th consecutive month, but at a slower pace than in April. The business conditions index moved to a reading of 19.1 in May, lower than the reading of 30.7 expected by economists.
The National Association of Home Builders’ May index rose to 22, its best result in 33 months. The reading shows that about one in five builders have a positive view of the market.
Concerns that the nearly $1 trillion bailout won’t solve Europe’s sovereign debt woes continued to weigh on the euro, which sank to a four-year low before crawling off its worst levels. The euro traded as low as $1.2322 before it rallied late in the day to 1.2384. The British pound also fell, dropping to its lowest level against the dollar since March 2009, before rebounding slightly. The Libor, the rate at which banks lend to each other overnight, was fixed at its highest level since August.
Meanwhile the Shanghai Composite tumbled 5.1% as worries rose that China could tighten monetary policy. But European stocks were generally firmer, with major indexes near flat toward the end of trading.
Merger activity was taken as a positive sign early in the session. Astellas Pharma said it will buy OSI Pharmaceuticals (OSIP) for $4 billion in cash, a 55% premium to the last trading day before the Japanese firm first tendered an offer for the U.S. biotech. OSI shares dropped early. Man Group of the U.K. said it will buy New York-listed hedge-fund manager GLG Partners (GLG) for $1.6 billion, or $4.50 a share, which is a 55% premium to Friday’s close. GLG shares jumped at the open.
Universal Health Services (UHS) said it will buy psychiatric facility operator Psychiatric Solutions (PSYS) for $2 billion, or $33.75 a share. Shares of UHS rose, while Psychiatric Solutions slipped in early trading.
Crude-oil prices slipped below $71 a barrel on the rising dollar.
For a detailed rundown on Monday’s trading session see our market story.
Winners
The surprise upswing late in the session boosted shares of the S&P 500 VIX Short-Term Futures Index fund (VXX) by 2.3%. The Semiconductor HOLDRS Trust fund (SMH) rose 1.7%.
Losers
A drop in metals prices pushed shares of the SPDR S&P Metals & Mining fund (XME) down 3.4%. The United States Oil fund (USO) dropped 2.6% as the rising dollar squeezed crude prices.
Similar Posts:
- Reversal of Misfortune for Stocks (Market Update)
- Big Drop Crushes ETFs and Indexes (Daily ETF Wrap-Up)
- Dow Hits 11000, First Time Since 2008 (Market Update)
- Stocks, ETFs Sag at Session End (Daily ETF Wrap-Up)
- Financials Lead Friday Slide for ETFs (Daily ETF Wrap-Up)
