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| Currency | US Dollar |
|---|---|
| British Pound to US Dollar | 1.568381 |
| Euro to US Dollar | 1.376273 |
| Japanese Yen to US Dollar | 0.011147 |
| Canadian Dollar to US Dollar | 0.936330 |
Stocks took a dive this morning after a report showed fewer new-home sales than expected, but the market slowly recovered, turning the shock into a flat session at worst.
The Dow Jones industrials closed down nearly 12 points at 12,469. The Nasdaq Composite Index finished with a 6.7-point gain to just under 2,456, and the Standard & Poor's 500 Index was up 1.4 points at 1,437.
The recovery came despite another increase in oil prices. Crude oil jumped to $62.91, up 63 cents from Friday, as tensions increased between Iran and the United Kingdom and the United States. Iran seized 15 British sailors on Friday.
At the same time, Iran said today that it will partially suspend cooperation with the United Nations nuclear watchdog while hard-line President Mahmoud Ahmadinejad said the latest UN sanctions wouldn't halt the country's uranium enrichment "even for a second."
Airlines stocks tumbled as oil prices jumped, and analysts warned motorists they can expect big increases in gasoline prices at the pump in the next month. Energy stocks were higher.
"The situation in the Middle East has become much more uncertain, and the risk of tensions intensified has underpinned the rise in oil prices and will continue to support (oil) prices," analyst David Moore of the Commonwealth Bank of Australia told CNNMoney.com.
- Video: Geopolitics and market risk
The price of oil has jumped 25% since mid-January.
Although the indexes did make a big comeback, the internals of the market weren't especially strong. Decliners were ahead of gainers on the New York Stock Exchange, on Nasdaq and among S&P 500 stocks. Fourteen of the 30 Dow stocks showed gains. Interest rates moved lower. The yield on the 10-year Treasury note fell to 4.587% from 4.61% on Friday.
| Mon. | Fri. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $62.91 | $62.28 | $0.63 | 1.81% | 3.05% |
| Heating oil (per gallon) | $1.7761 | $1.7111 | $0.0650 | -0.24% | 11.15% |
| Natural gas (per million BTU) | $7.2540 | $7.2690 | -$0.0150 | -0.63% | 15.16% |
| Unleaded gasoline (per gallon) | $2.0677 | $1.9983 | $0.0694 | 11.91% | 29.06% |
A nasty surprise on home sales
The home sales report was the big surprise today. The Commerce Department reported that new-home sales fell 3.9% in February to an annual pace of 848,000, the lowest level since June 2000.Economists had expected a 7% increase in February to 1.02 million from a previously reported 937,000 in January. The revised number for January came in at 882,000, however.
Inventories of unsold homes at the current sales pace rose 1.5% to 546,000, the highest level in 16 years.
"We're probably not going to see the pickup in housing by the end of the year that we were looking for," Michelle Meyer, an economist at Lehman Bros., told Bloomberg News. "Housing imbalances will take longer to correct because inventories aren't declining very fast."
Home-building stocks were down on the day. The Philadelphia Housing Sector Index was down 1.2%, with KB Home (KBH, news, msgs) down 1.9% at $45.99 and Lennar (LEN, news, msgs) down 2.3% at $44.54.
Abbott's new stents show positive results
Drug company Abbott Laboratories (ABT, news, msgs) said a trial of its new drug-coated stent Xience showed it to be more effective than rival Boston Scientific's (BSX, news, msgs) Taxus, which is the best-selling stent in the U.S.Abbott shares were up 6.3% to $57.24; Boston Scientific was down 6.6% to $14.22.
The study was presented at the annual meeting of the American College of Cardiology in New Orleans over the weekend. The study showed that Abbott's Xience stents were less likely than Boston Scientific's stent to have blockages come back after eight months.
A stent is a small, expandable tube that is inserted in a blocked vessel or artery to prevent them from closing after angioplasty.
But whether stents actually do any more than drugs came under fire today. A new study says more than half a million people a year with chest pain are getting an unnecessary or premature procedure to unclog their arteries because drugs are just as effective.
The landmark study challenges one of the most common practices in heart care. The stunning results found that angioplasty did not save lives or prevent heart attacks in non-emergency heart patients. An even bigger surprise: Angioplasty gave only slight and temporary relief from chest pain, the main reason it is done.
Big job cuts at Citi?
U.S. banking giant Citigroup (C, news, msgs) is getting ready to announce a restructuring plan that would involve up to 15,000 job cuts and a $1 billion-plus charge against earnings, The Wall Street Journal reported.Citi is expected to make the plan public by April 16, when it reports first-quarter results. Shares were down 0.4% at $51.54 today.
The move would follow remarks last summer by Citigroup's biggest shareholder, Prince Alwaleed bin Talal of Saudi Arabia, who said the company must take "Draconian" measures to cut expenses, the Journal reported.
Citigroup CEO Chuck Prince has faced increased pressure from all sides to reduce expenses and to boost the company's stock price. The company saw a 15% rise in operating expenses last year of $52 billion, double the 7% rise in revenue growth, the newspaper said.
Prince first announced a cost-cutting review last year.
Other economic news
There's more economic news due this week that could affect the markets. A report on durable-goods orders comes out Wednesday; economists are looking for a 3% rise for February. Durable goods fell 7.8% in January.More from MSN Money
"Chairman Bernanke is likely to (say) that we don't need much regulation and that the markets can take care of themselves. The markets will like that, and I think it'll be a soothing influence," Allegiant Asset Management investment strategist Brian Stine told MarketWatch.
Last week, the Fed decided to leave rates unchanged at 5.25% but altered its policy statement slightly to indicate a move away from tightening. The news prompted a broad rally in stocks, and the S&P 500 rose 3.6% for the week, its strongest growth since the week of March 17, 2003.
Medical-equipment merger
Laboratory-equipment maker Beckman Coulter (BEC, news, msgs) is buying diagnostics-testing company Biosite (BSTE, news, msgs) for $1.55 billion, or $85 per Biosite share.The price, a 53% premium over Biosite's closing price Friday of $55.38, caused Piper Jaffray's analyst to downgrade Beckman Coulter to "market perform" from "outperform." The analyst said the deal would be dilutive to Beckman's earnings per share through 2008.
Beckman Coulter shares were down 6.8% on the day at $62.51, but the company's CEO was positive about the deal. "We have absolutely no doubt that we're getting a great company," Scott Garrett told CNBC this morning. Biosite was up 51.3% to $83.80.
The companies have been working together for the past four years.
Merck and Schering-Plough team up
Drug makers Merck (MRK, news, msgs) and Schering-Plough (SGP, news, msgs) announced today that they are joining forces to launch a cholesterol treatment that combines their Zetia cholesterol drug with a generic version of rival Pfizer's (PFE, news, msgs) hugely successful Lipitor, after its patent expires in 2010.Schering-Plough was up 2.1% to $25.14. Merck shed 0.9% to $44.07.
Lipitor is the world's best-selling prescription drug, with sales in 2006 of $12.9 billion. But when its patent expires, other drug makers will be able to produce a generic version of the drug; it is this generic version that Merck and Schering-Plough are planning to market with Zetia.
Pfizer shares shed 10% in December after the drug company stopped the development of its torcetrapib treatment, which it had hoped would replace Lipitor when its patent expires.
In addition to Zetia, Merck and Schering-Plough already jointly market Vytorin, another cholesterol drug.
Dell up on an upgrade; Microsoft sells 20 milllion copies of Vista
Computer maker Dell Inc. (DELL, news, msgs) shares jumped 3.5% to $23.62 after Goldman Sachs analyst Laura Conigliaro upgraded the stock upgraded to "buy" from "neutral," citing the company's restructuring plan."Although we know we are early and there will be inevitable backsteps, the history of turnarounds suggests that a good part of the stock rise comes in the first 12 months," Conigliaro wrote today.
Separately, Microsoft (MSFT, news, msgs) shares were up 0.7% to $28.22. The company (and publisher of MSN Money) said it had sold 20 million copies of its Windows Vista operating system to consumers, compared with 17 million copies of Windows XP in the first two months of its launch.
Analysts, however, said it was too early to make any conclusions about Vista's popularity.
| Mon. | Fri. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Treasurys | |||||
| 13-week Treasury bill | 4.930% | 4.925% | 0.005 | -2.18% | 0.92% |
| 5-year Treasury note yield | 4.478% | 4.510% | -0.032 | -0.56% | -4.74% |
| 10-year Treasury note yield | 4.587% | 4.613% | -0.026 | 0.81% | -2.61% |
| 30-year Treasury bond yield | 4.783% | 4.799% | -0.016 | 2.44% | -0.73% |
| Currencies | |||||
| U.S. Dollar Index | 82.80 | 83.00 | -0.20 | -0.84% | -0.76% |
| British pound in dollars | $1.970 | $1.962 | 0.008 | 0.33% | 0.55% |
| Dollar in British pounds | £0.507 | £0.510 | -0.002 | -0.33% | -0.55% |
| Euro in dollars | 1.334 | 1.329 | 0.005 | 0.79% | 1.05% |
| Dollar in euros | € 0.7497 | € 0.7525 | -0.003 | -0.78% | -1.04% |
| Dollar in yen | ¥118.11 | ¥118.05 | 0.06 | -0.37% | -0.76% |
| Commodities | |||||
| Gold | $663.90 | $664.20 | -$0.30 | -1.28% | 4.06% |
| Copper | $3.1385 | $3.0730 | $0.07 | 14.04% | 9.32% |
| Silver | $13.4100 | $13.4800 | -$0.07 | -5.80% | 3.67% |
| Crude oil (NYMEX) (per barrel) | $62.91 | $62.28 | $0.63 | 1.81% | 3.05% |
Tribune bidders boo process
Billionaires Ron Burkle and Eli Broad are not pleased with Tribune's (TRB, news, msgs) process of looking for an acquirer for the newspaper company, according to The Wall Street Journal. They wrote a letter to Tribune's board that contends the company has been favoring real-estate magnate Sam Zell.The billionaire bidders asked Tribune to give them the details of the employee-stock-ownership plan that would be created in a deal with Zell, the newspaper reported.
The company put itself on the market in September and has been considering bids from Burkle, Broad and now Zell.
Tribune is also considering a recapitalization plan in which it would sell its broadcast assets. Tribune shares were up 1.9% to $31.12.
By Charley Blaine and Elizabeth Strott
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