Stocks ended a lethargic session moderately lower Monday, as a lack of economic news returned investors’ focus to interest rates and inflation ahead of comments from new Federal Reserve Chairman Ben Bernanke later this week.
Reports that Merrill Lynch & Co. is in talks to buy almost half of money manager BlackRock Inc. drew a positive reaction from the market, but an article warning of intensifying competition for Google Inc. saddled technology stocks and expanded the Nasdaq composite index’s recent slide.
Trading was relatively quiet while investors awaited Bernanke’s first congressional testimony on Wednesday, said Jack Ablin, chief investment officer for Harris Private Bank. Many thought January’s interest rate hike would be the last for a while, but recent signs of economic growth have renewed debate over whether the Fed will go further to stifle inflation, he said.
“Right now, the transparency we had with [former Chairman Alan] Greenspan is gone. We’re trying to get some semblance of which way the Fed is going to go,” Ablin said, adding that a strong first-quarter gross domestic product figure would likely guarantee another rate increase at the Fed’s May meeting.
The Dow Jones industrial average finished the day down 26.73 points, or 0.24 percent, while the broader Standard & Poor’s 500-stock index declined 4.13 points, or 0.33 percent. The Nasdaq composite index, full of technology stocks, slid 22.07 points, or 0.98 percent.
Energy prices were little changed despite a heavy weekend snowstorm blanketing the northeastern states, a major consumer of heating oil.
Merrill Lynch could trade its asset management business for a 49 percent stake in BlackRock, according to The Wall Street Journal. Several weeks ago, rival Wall Street firm Morgan Stanley reportedly dropped a deal to buy a BlackRock stake.
Shares of BlackRock surged $10.48 to $141.99, Merrill Lynch rose $1.04 to $73.83 and Morgan Stanley fell 50 cents to $59.81.
The Justice Department may challenge Whirlpool Corp.’s $1.79 billion acquisition of Maytag Corp. for antitrust violations, the Journal also reported. The combined firm would produce half of the nation’s dishwashers and more than 70 percent of laundry machines. Whirlpool sank $1.45 to $85.83, but Maytag rose 40 cents to $16.61.
Home-improvement retailer Home Depot Inc. is reportedly in talks to acquire 49 percent of Orient Homes, one of China’s top do-it-yourself chains, for more than $200 million, the Financial Times said. Home Depot rose 48 cents to $39.70.
A downbeat report on Google Inc. pulled the Web search engine $19.91 lower to $345.70. The Barron’s article said Google’s stock price could be cut in half this year amid mounting competition from Microsoft Inc. and Yahoo Inc. Microsoft was off 30 cents at $26.39, and Yahoo slipped 47 cents to $32.04.
(MSNBC is a Microsoft-NBC joint venture.)
In earnings news, Agilent Technologies Inc. said its first-quarter profit skyrocketed on a $1.84 billion gain from selling its semiconductor products business, and forecast 2006 results in line with estimates. Agilent nonetheless tumbled $1.42 to $34.45.
Overseas, Japan’s Nikkei stock average plunged 2.34 percent. In Europe, Britain’s FTSE 100 added 0.51 percent, Germany’s DAX index gained 0.96 percent and France’s CAC-40 was higher by 0.95 percent.
