Stocks Struggle as Banks Erase Some Gains
Stocks struggled Wednesday as investors juggled some encouraging bank news from Europe against a disappointing report on private-sector employment in the U.S.
The Dow Jones Industrial Average bobbed in and out of positive territory.
ADP said the private sector added just 13,000 jobs in June, well below expectations.
The report is closely watched ahead of the government's jobs report, due out on Friday. Economists expect to see 110,000 jobs were lost from nonfarm payrolls in June, according to the latest Reuters survey, which would snap a five-month streak of gains.
Financials erased some of their earlier gains. The sector had been leading earlier following news that European banks borrowed less from the European Central Bank than expected and that Democrats have agreed to drop the $18 billion tax on banks in the financial-reform legislation and will look for other means to fund the bill.
Bank of America and JPMorgan were lower, after leading Dow gainers earlier.
The Dodd-Frank bill, as the financial legislation is now called, could come up for a vote in the House sometime today and is expected to pass.
Meanwhile, the Financial Crisis Inquiry Commission begins its two-day hearings on derivatives — especially those sold by Goldman Sachs and AIG — and the role of derivatives in the financial crisis.
BP shares rose as optimism grew that the Gulf oil spill would be under control soonand on belief that the company may draw interest in a takeover deal.
Shares of electric-car maker Tesla continued to rise after jumping 40 percent on their debut Tuesday.
Netflix shares skidded following news that Hulu will begin charging a subscription fee of $9.99 a month for access to its library of TV shows and movies.
Verizon skidded a day after a report in Bloomberg that the company may start selling an Apple iPhone using Verizon as the provider as early as January. Verizon said it would neither confirm nor deny the report.
A lot of activitiy on the M&A front:
Dow component Boeing will pay $775 million for Argon in a bid to grow its sensors, communication technologies and information management capabilities.
In biotech, Celgene has agreed to buy Abraxis Bioscience for at least $2.9 billion in cash and stock. The move will expand Celgene's cancer drug portfolio.
Drug giant Sanofi Aventis said it intends to buy TargeGen for $560 million to expand its offering of oncology products.
AstraZeneca scored a victory in its Crestor patent case, causing a slew of analysts, including those at Morgan Stanley and UBS, to raise their view of the company. But after a 9 percent rally Tuesday, shares cooled off this morning, dropping nearly 1 percent in premarket trading.
Still to Come:
WEDNESDAY: Fed's Lockhart speaks
THURSDAY: Weekly jobless claims; ISM manufacturing index; construction spending; pending-home sales; June auto sales
FRIDAY: June jobs report; factory orders
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