21 June 2004
Market News
Posted by Zane under: News .
U.S. stocks rose slightly on Monday afternoon, as Wachovia Corp.’s $14 billion deal to acquire SouthTrust Corp. bolstered sentiment, but caution before next week’s Federal Reserve meeting and U.S. transfer of power in Iraq restrained buyers. SouthTrust shares helped push the broad market higher after Wachovia, the No. 4 U.S. bank, agreed to buy SouthTrust for $14.3 billion in stock. The deal follows recent major U.S. bank acquisitions announced since October.Cisco Systems Inc. and Nortel Networks Corp. both rose in active trading, helped by a report the chief executives of both companies met on Friday in Toronto, a sign that talks of a partnership between them is getting serious.
The Dow Jones industrial average rose 8.61 points, or 0.08 percent, to 10,425.08. The Standard & Poor’s 500 Index added 1.50 points, or 0.13 percent, to 1,136.51. The technology-laced Nasdaq Composite Index gained 3.95 points, or 0.20 percent, to 1,990.68.
Many investors are hesitant to place large orders ahead of the Federal Reserve’s policy-setting meeting on June 29-30.
Wall Street widely expects the Fed will start a tightening cycle by raising interest rates by one-quarter of a percentage point at the end of the meeting in a bid to curb inflation.
June 30 also marks the handover of power in U.S.-occupied Iraq to an interim Iraqi government, a date that many investors fear could be marked by an escalation of violence.
“The market is kind of caught right now between fabulous fundamentals — powerful earnings, strong growth in the economy and jobs — and uncertainties about how aggressively the Fed will raise rates and the war and the election and oil prices,” said Milton Ezrati, senior economic strategist at Lord Abbett & Co. “And this is where we’ve been stuck for quite a while.”
Crude oil prices retreated on the New York Mercantile Exchange. July crude prices fell 95 cents to $37.80 a barrel. On Friday, they ended higher for the third straight day.
Wal-Mart Stores Inc. restrained the blue-chip Dow, after the discount retailer indicated that June sales at stores open at least a year could miss its expectations. Shares of Wal-Mart, the world’s largest retailer, shed 40 cents, or 0.7 percent, to $55.22.
Nortel shares rose 12 cents to $4.56 on the New York Stock Exchange, where they were the most active issue. Cisco shares shed 23 cents to $23.20 on the Nasdaq.
Wachovia shares fell $1.55, or 3.3 percent, to $45.45, while those of SouthTrust jumped $4.91, or 14.1 percent, to $39.69.
Taser International Inc. shares soared, after the stun gun maker raised its revenue forecast for the year, citing strong new business from U.S. law enforcement agencies.
Shares of Taser, whose volatile stock has been the focus of much debate about its high valuation, rose $4.78, or 18.5 percent, to $30.54.
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