By Anora Mahmudova and Carla Mozee, MarketWatch Dow flirts with
record territory
NEW YORK (MarketWatch) -- After flipping between small gains and
losses in a choppy trading day, U.S. stocks ended fractionally
higher. A small gain on the S&P 500, however, was enough to
push the index to a record close, its 42nd this year.
Stocks were under pressure in the morning trade following news
that Japan fell into recession and less-than-stellar manufacturing
data in the U.S.
Comments from European Central Bank president Mario Draghi, who
said that the ECB would be open to buying government bonds, if
needed, buoyed U.S. stocks in afternoon trade before pulling back
somewhat.
Overall, U.S. stocks seemed hesitant to make a break-out move in
either direction.
The S&P 500 (SPX) added 1.5 points to 2,041.43, new record
close. The Dow Jones Industrial Average (DJI) hovered near record
levels, but closed just below it after adding 13 points, or 0.1%,
to 17,647.75. The Nasdaq Composite (RIXF) finished the day down
17.5 points, or 0.4%, at 4,671.00
Economic data: The Empire State manufacturing index, the first
of the many regional manufacturing gauges to be released, rebounded
slightly in November, but is still well below September levels,
indicating a downshift in activity.
Separately, industrial production fell unexpectedly in October,
the second drop in the last three months, the Federal Reserve said
Monday. In a sign that falling oil prices are beginning to effect
the energy industry, oil and gas well drilling fell for the first
time since February.
Meanwhile, Japan's real gross domestic product shrank 1.6% in
the third quarter, contributing to the decline was companies
cutting inventories and subdued capital investment. Economists
surveyed by The Wall Street Journal had, on average, been looking
for the economy to expand by 2.25%.
Stocks to watch:Baker Hughes Inc.(BHI) shares surged 8.9% after
Halliburton Co.(HAL)agreed to purchase its rival oil-services
provider in a cash-and-stock deal valued at $34.6 billion. The deal
is expected to close in the second half of 2015. Halliburton shares
fell 11%.
Tyson Foods Inc. (TSN) shares climbed 5.8% as the meat producer
said quarterly sales rose 14%.
Botox maker Allergan Inc. (AGN) neared a deal to be acquired by
Actavis PLC(ACT), according to The Wall Street Journal. Allergan
prices jumped 5.3%, and Actavis shares rose 1.7%.
Hasbro Inc.(HAS) shares rose 4.4% as merger talks between the
Transformers toy maker and DreamWorks Animation SKG Inc. (DWA) fell
through, according to reports.
(Read more about the day's notable stocks in Movers &
Shakers column:
http://www.marketwatch.com/story/tyson-urban-outfitters-agilent-earnings-in-focus-2014-11-16.)
Other markets: Japanese stocks sank after the GDP report,
leaving the Nikkei Stock Average down 3%. The Japanese yen,
meanwhile, slid to a seven-year low against the U.S. dollar
(USDJPY), but recovered somewhat allowing the dollar to buy more
than Yen116. The country's Prime Minister Shinzo Abe said he will
decide on whether to move forward with a planned sales-tax increase
following analysis of the situation, according to media reports
Monday. Abe may also call for a snap election to be held next
month.
"The stock market and currency could remain volatile until Mr.
Abe confirms his intentions. There is, of course, the prospect of
further economic stimulus as well," said Richard Troue, head of
investment analysis, at Hargreaves Lansdown, in a Monday note.
December crude-oil futures (CLZ4) fell 0.9%, resuming a run of
losses. European stocks closed higher after Mario Draghi comments
on potential purchases of government bonds. Gold futures (GCX4)
were flat at about $1,185.7 an ounce.
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