Stocks Flop as Late Rally Fizzles; Banks Gain
Stocks ended flat Monday as a late rally fizzled after the Supreme Court issued a stay, temporarily halting the sale of Chrysler to Fiat.
Stocks had staged a late rally as financials bounced back, after being lower for much of the day as last week's jobs report spurred worries that the Federal Reserve may raise rates at its next meeting.
The Dow Jones Industrial Average essentially finished flat, up 1.36, or 0.02 percent, to close at 8,764.49.The S&P 500 fell 0.1 percent, while the Nasdaq slipped 0.4 percent.
The Supreme Court temporarily halted the sale of Chrysler to Italy's Fiat after an Indiana pension fund and consumer groups petitioned the high court. Chrysler had cautioned that such an action could force it to liquidate.
General Motors shares rose 40 percent to $1.21 on this, the first day GM is technically out of the Dow.
Cisco and Travelers made their debut on the Dow today, replacing GM and Citigroup.
Financials rebounded from an early decline, with JPMorgan, American Express and Bank of America the three biggest percentage gainers on the Dow.
McDonald's skidded 1.9 percent after the fast-food giant reported its same-store sales rose 5.1 percent in May but missed the markand said currency fluctuations could dent the current quarter's earnings.
Meanwhile, some large institutions may soon be allowed to repay federal TARP loans, spurring worries that if they're allowed to repay too soon, it could make things more difficult should the institutions need more money again later.
Asian and European markets declined, with commodity stocks dragging down the indexes on softer raw material prices. Some profit-taking in the basic resource sector may take place, after last week's sharp rise after mining giants Rio Tinto and BHP Billiton agreed to an iron-ore joint venture, according to various analysts.
Oil slipped about 35 cents Monday, settling at $68.09 a barrel.
Apple fell 0.6 percent as the company's developers conference started today and, despite the buzz in the Applesphere, CEO Steve Jobs didn't appear. Apple did, however, take the unconventional step of unveiling its new iPhones at the conference today, including one for $99.
This comes after Palm's answer to the iPhone, the Pre, debuted last week to rave reviews. Palm shares shed 6.5 percent.
Shares of Dow component AT&T skidded 0.7 percent after Goldman Sachs removed the company from its "conviction buy" list on belief that investors may cycle out of telecoms.
Kohlberg Kravis Roberts struck a deal with Fidelityto sell shares of KKR initial public offerings to retail customers.
On the other side of the pond, Barclays confirmed it's in talks with BlackRock and Bank of New York Mellon to sell its investment arm, Barclays Global Investors (BGI) for $12 billion. BlackRock is said to be the frontrunner.
MON-FRI: Apple developers' conference
TUESDAY: Joint congressional hearing on TARP oversight; Manpower quarterly employment-outlook survey; wholesale trade
WEDNESDAY:Weekly mortgage applications; Fed's Evans speaks; Weekly crude inventories; federal budget; Fed's beige book
THURSDAY: Retail sales; weekly jobless claims; business inventories; Fed's Lockhart speaks; Earnings from Nat Semi
FRIDAY: Import/export prices; consumer sentiment