A pop in stocks following the factory-orders report fizzled, the latest gyration in the market's yo-yo pattern today.
Earlier, stocks had gotten a boost from a General Motors restructuring plan and comments from Federal Reserve Chairman Ben Bernanke, but that, too, evaporated.
Factory orders rose 1.1 percent in April, well above the 0.1-percent decline economists had expected. That was a solid follow on March's upwardly revised 1.5-percent gain. Excluding transportation, factory orders posted a second-straight 2.6-percent increase.
The rise in factory orders was largely due to stronger demand for nondurable items such as food and clothing. Demand for durable goods such as appliances and automobiles, however, waned. A gauge of business spending jumped 4 percent.
Bernanke issued a rare warning on the risks a weak dollar poses for inflation. The Fed chairman also hinted that the central bank may end this recent string of rate cuts, saying interest rates are "well-positioned" for an economy grappling with both price pressures and threats to growth.
Lehman Brothers' shares skidded after a source told Reuters that the brokerage's plan to raise $4 billion in capital would only go into effect if absolutely necessary.
Meanwhile, GM shares jumped after the auto maker announced a restructuring plan that includes the shuttering of four truck plants in North Americaas it shifts toward smaller vehicles. The company is developing a hybrid vehicle, the Chevy Volt, and is even mulling a sale of its Hummer division.
Luxury home builder Toll Brothers said it swung to a loss for the second quarter, but it was not as bad as the market had feared. The company blamed continued weak demand in most markets amid a housing slump which is heading into its second year.
And in merger and acquisition news, office supplies retailer Staples raised its all-cash bid for Dutch business products company Corporate Express for the second time to 1.7 billion euros ($2.65 billion), in an attempt to break into the Dutch market.
Richard A. Grasso, former chairman of the New York Stock Exchange, may be able to keep the staggering $185 million award that once made him a symbol of Wall Street greed -- a package awarded to him by the A-list board members at the exchange who eventually fired him.
TUESDAY: Auto sales; factory orders; Bernanke speaks; Earnings from Toll Brothers, Hovnanian; Montana, New Mexico primaries
WEDNESDAY: MBA mortgage applications; productivity; ISM services index; crude inventories; Bernanke, Lockhart speaks
THURSDAY: Jobless claims; Fed's Plosser speaks; Earnings from Nat Semi
FRIDAY: Jobs report; wholesale trade; consumer credit; Fed's Evans, Bullard speak
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