The three main indexes initially rose as investors tried to assess the future of global security. But shares lost their momentum as the session wore on.
“The Osama bin Laden situation really had a nice impact at the open,” said Douglas S. Roberts, the chief investment strategist for the Channel Capital Research Institute. “It looks like a lot of that might have been short-covering.”
Jeffrey Kleintop, the chief market strategist for LPL Financial, called the early rise a knee-jerk reaction.
“Then a thoughtful process comes out,” he said, “that maybe the risks have shifted.”
At the close, the Dow Jones industrial average was 3.18 points lower, at 12,807.36, while the broader Standard Poor’s 500-stock index lost 2.39 points, or 0.18 percent, to 1,361.22. The technology-heavy Nasdaq lost 9.46 points, or 0.33, percent, at 2,864.08.
The S. P. health care index was up more than 1 percent after Teva Pharmaceutical Industries said it had agreed to buy the biopharmaceutical company Cephalon for $6.8 billion, a deal unanimously approved by the boards of the two companies.
Teva shares rose more than 3 percent, to $47.27, while Cephalon was up more than 4 percent at $80.11.
The dollar was mixed. The euro rose to $1.4846 from $1.4806 late Friday, while the British pound slipped to $1.6683 from $1.6706. The dollar rose to 81.30 yen, from 81.20 yen.
The dollar has been weak across the board, with United States interest rates low and some central banks beginning to lift rates. Debt limit negotiations in Congress are not helping, said Brian Dolan, the chief currency strategist at Forex.com.
The Treasury Department said it would initiate emergency measures on Friday to keep the federal government’s total borrowing under the maximum allowed by law, as Congress continues to debate the terms of any increase in the debt ceiling.
“It is still a weak dollar environment,” Mr. Dolan said. “That is the significant takeaway: the dollar downtrend is very much intact.”
The Japanese and South Korean markets were already 1 percent higher before President Obama announced late Sunday that American forces had killed Bin Laden in Pakistan.
By the close, the Nikkei 225 index had gained 1.6 percent, to 10,004.20 points, the first time the index closed above 10,000 since the devastating earthquake and tsunami struck the country on March 11.
In Europe, the Euro Stoxx 50 index, a barometer of euro zone blue chips, slipped 0.1 percent. The CAC 40 in Paris rose 1.85 points and the DAX in Frankfurt rose 0.18 percent. London markets were closed for a bank holiday.
On the economic front, the Institute for Supply Management, a trade group of purchasing executives, said its index of manufacturing activity dipped to 60.4 in April but remained above 60 for a fourth month. That was down from 61.2 in March and 61.4 in February, the fastest expansion in nearly seven years. A reading above 50 signals growth.
In addition, construction spending rose 1.4 percent in March, helped by an increase in spending on home-improvement projects.
In other corporate news, Arch Coal said it would buy the International Coal Group in a cash deal worth $3.4 billion that will create one of the world’s largest coal producers. Arch shares fell 2.2 percent to $33.53, while International Coal rose more than 30 percent to $14.43.
Dish Network and the EchoStar Corporation have agreed to pay TiVo $500 million to settle a patent infringement lawsuit involving TiVo’s video recording technology, putting an end to a long and costly legal battle. Stock in TiVo rose more than 3 percent to close at $9.86.
Many analysts cautioned, however, that Bin Laden’s death could stoke, rather than ease, worries about oil supplies and global security in the longer run if it led to retaliatory attacks.
Energy stocks were lower. Crude oil slipped 41 cents to settle at $113.52 a barrel in volatile trading in New York.
Spot gold fell $18.35, to $1,545.35 an ounce.
Silver prices dropped more than 5 percent on Monday, a decline attributed to a decision by the CME Group, which is the parent of the Chicago Board of Trade, to increase the margins for futures trading on silver.
In the bond market, the benchmark 10-year bond gained 2/32, while the yield fell to 3.28 percent, from 3.29 percent late Friday.
David Jolly and Bettina Wassener contributed reporting.
Article source: http://www.nytimes.com/2011/05/03/business/03markets.html?partner=rss&emc=rss
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