Stock Flop as Four-Day Rally Fizzles
The rally on Wall Street fizzled Monday, snapping a four-day streak that sent stocks up more than 4 percent.
The Dow Jones Industrial Average ended pretty much flat, up just 3.32 points, while the S&P 500 and Nasdaq shed 0.1 percent.
A big selloff last Monday had started talk that a correction may be underway but the four-day rally that followed quickly quashed that. Stocks finished Friday at their highest levels since last October. Despite today's flat finish, the Dow is on track for its fifth month of gains in the past six, and for the S&P and Nasdaq, their sixth.
Financial stocks were among the day's most heavily traded. In fact, Citigroup, Fannie Mae and Freddie Mac accounted for more than 25 percent of all volume on the New York Stock Exchange.
Traders said they don't actually believe Fannie and Freddie have equity value — they're just trading on momentum. On Friday, the Federal Reserve bought $5.6 billion in housing debt in an attempt to spur borrowing by keeping rates low.
Credit-card companies, including American Express , Capital One and Discover Financial , were in the spotlight after Barclays upgraded the sector to "overweight." All three were higher in morning trading but by the close, only Discover was in positive territory.
Banks tanked after analyst Dick Bove said 150 to 200 more U.S. banks are going to failbefore it's all over.
SunTrust Banks lost 3.8 percent after the bank said more credit losses are coming down the pike and commercial real estate may be shaky through next year.
Shares of Warner Chilcot soared 27 percent after the contraceptive maker said it has agreed tobuy Procter & Gamble's prescription-drug business for $3.1 billion. P&G shares slipped 0.5 percent.
And the Ricketts family has finalized a deal to buy the Chicago Cubs from Tribune for $845 million. That transaction still needs the approval of major league baseball owners, and the court that's overseeing Tribune's bankruptcy case.
Energy stocks were among the few advancers after oil settled above $74 a barrel. Both ExxonMobil and Chevron gained more than 1 percent.
Pharmaceuticals also ended higher, with Abbott Labs up 1.5 percent and Pfizer up 0.5 percent.
Advanced Micro Devices , which has fallen more than 25 percent in the past year, gained 8.1 percent following an upgrade from Citigroup.
Elsewhere in tech land, Finnish handset maker Nokia is planning to enter the PC market with a netbook computer.
Volume was light, with 1.23 billion shares changing hands on the New York Stock Exchange. Advancers outpaced decliners, roughly 15 to 14.
The news will pick up as the week goes on. On tap are more than $100 billion in Treasury auctions, a report on bailout executive pay, durable-goods orders, new-home sales, the second reading on second-quarter GDP, personal income and spending, consumer confidence and spending, and earnings from Dell and Tiffany.
Send comments to email@example.com.