Wall Street extended its losses Monday, as investors awaited a stream of key economic data this week and were left disappointed by the collapse of several closely-watched acquisition deals.
The markets, which pulled back last week amid concern about inflation’s impact on interest rates, traded cautiously with Federal Reserve Chairman Ben Bernanke set to testify about the economy before Congress on Wednesday. Government data due Friday should shed light on wholesale inflation and the state of the housing market.
Unlike recent Mondays, there was a dearth of acquisition announcements to give the market a lift. Instead, investors had to deal with news that the Nasdaq Stock Market Inc. failed in its bid to buy the London Stock Exchange and that French drugmaker Sanofi-Aventis called off talks for a possible deal with Bristol-Myers Squibb Co.
Onyx Pharmaceuticals Inc. and Bayer AG advanced after the companies released data from a clinical trial that shows an experimental drug is effective in fighting liver cancer. Apple Inc. moved higher after being upgraded in anticipation of big product launches set this year.
Wall Street fell last week on concerns about higher oil prices and the possibility that inflation could lead to higher interest rates. With fourth-quarter earnings reports nearly over, investors have traded hesitantly as they wait for some kind of catalyst to give them direction.
“With all the data coming out, and Bernanke possibly taking a more hawkish tone, this causes the markets to be very cautious and tentative,” said Alan Gayle, senior investment strategist for Trusco Capital Management. “There’s just been a lot of nervousness going into this week, and the weak start is a carryover from last week.”
The Dow Jones industrial average closed the day down 28.28 points, or 0.22 percent, while the broader Standard & Poor’s 500-stock index was off 4.69 points, or 0.33 percent, and the Nasdaq composite index lost 9.44 points, or 0.38 percent.
Bonds fell ahead of economic data due out this week, with the yield on the benchmark 10-year Treasury note up at 4.80 percent from Friday at 4.78 percent late Friday. The dollar was mostly higher against other major currencies, while the price of gold dropped.
Oil, which advanced last week as cold weather was seen increasing heating demand, fell on the New York Mercantile Exchange, with a barrel of light sweet crude closing at $57.81, down $2.08.
The drop caused major oil makers to tumble, with Dow industrial Exxon Mobil Corp. down 62 cents at $74.60; ConocoPhillips off 96 cents at $66.03; and Chevron Corp. lower by $1 at $72.32.
Jack Ablin, chief investment officer at Harris Private Bank, said he’s perturbed about investor sentiment since there really hasn’t been any big corporate or economic news behind the retreat.
“This looks like a quiet market with no economic news,” he said. “I’m somewhat concerned that the market is tending to drift lower, and maybe there’s a slight change in sentiment out there.”
Investors and analysts have been digesting economic data, speeches by policymakers, and earnings reports to see if Wall Street can continue the yearend rally of 2006. So far, projections about the economy have been mixed — and left the markets drifting so far this year.
Nasdaq, the world’s largest electronic equities exchange, fell after LSE shareholders did not approve its bid to acquire the British bourse. The U.S. exchange reports fourth-quarter earnings on Tuesday, and its shares fell $2.10, or 5.7 percent, to $35.10.
Bristol Myers tumbled 93 cents, or 3.3 percent, to $27.59 after a report that Sanofi-Aventis called off deal talks amid a disagreement over price.
But aluminum producer Novelis Inc. rose $5.13, or 13.3 percent, to $43.67 after it agreed to be bought by India’s Hindalco Industries Ltd.
Home Depot Inc., the world’s largest home improvement store chain, said it is considering shedding its division that serves contractors, homebuilders, and other business customers. Shares rose 44 cents to $41.44.
Apple, which recently unveiled plans to roll out its long-anticipated iPhone, rose $1.61 to $84.88 after it was upgraded by a Citigroup analyst. Micron Technology Inc. shed 29 cents, or 2.3 percent, to $12.27 after it warned prices would drop this quarter.
Meanwhile, good news about a potential treatment for liver cancer sent Bayer up 62 cents to $58.45 and Onyx up $11.89, or 97 percent, to $24.15.
Overseas, Japan’s markets were closed. At the close, Britain’s FTSE 100 was down 0.46 percent, Germany’s DAX index fell 0.75 percent and France’s CAC-40 was off 0.85 percent.
