Stock Market News for September 28, 2010 - Market News

Activity on the deal-making front failed to send stocks higher on the first day of a new week as investors booked gains after Friday’s solid advance. With no economic data in sight, the selling intensified in the final hour of trading, sending the Dow industrials off 48 points and taking broader averages modestly lower.

The 30-share Dow average closed at 10812.04, off 0.4%. The broader S&P 500 index fell 0.6% to 1142.16 and the tech-heavy Nasdaq composite index dropped nearly 12 points, or 0.5%, to 2369.77. On the New York Stock Exchange, about 920 million shares exchanged hands as falling stocks beat those that advanced in price by a four-to-three margin.

In a sign that confidence was slowly returning to the market, retailing giant Wal-Mart (NYSE:WMT) announced that it was planning to acquire South African retailer Massmart Holdings Ltd., which owns Game and Makro chains, for about $4 billion. Shares in Wal-Mart fell 1.1%. Unilever (NYSE:UN), the consumer goods company, said it agreed to acquire Alberto Culver (NYSE:ACV) for about $3.7 billion in an effort to strengthen its offerings in the personal care segment. Shares in Alberto Culver jumped 20% and Unilever added 1%.

This morning’s stock futures suggest a modestly higher opening as a fresh round of corporate deal making boosts optimism. Some better-than-expected economic reports from overseas are also adding to bullish sentiments this morning.

Gold prices reached $1298.60, just shy of the $1300 mark. US Treasuries rose in price, with the 10-year up 21/32, and the corresponding yield eased to 2.531%. Today’s schedule includes a $35 billion auction of 5-year Treasuries. Yesterday’s sale of $36 billion 2-years brought a record low yield of 0.44%.

Elliott Wave’s Robert Prechter added to the gloomy sentiments, predicting the DJIA’s fall below 1,000 in the next six years. Appearing on the CNBC, Prechter noted safe-haven investments such as cash and US Treasury debt were the most attractive holdings. However, Stock Traders Almanac’s Jeffrey Hirsch took an altogether different stance, predicting DJIA’s surge to 38,820 in an 8-year boom starting in 2017.

All but six of the DJIA thirty fell on the day, led by declines in Bank of America (NYSE:BAC), off 2.7%, Travelers (NYSE:TRV), down 1.8%, JP Morgan (NYSE:JPM), off 1.7%, and General Electric (NYSE:GE), down 1.4%. AT&T (NYSE:T) added 1.0%, while American Express (NYSE:AXP), Hewlett-Packard (NYSE:HPQ), and Verizon (NYSE:VZ) added 0.7%.

Among S&P500 industry groups, financials led with a drop of 1.1%. Fueling sovereign debt concerns in the eurozone, Moody’s (NYSE:MCO) cut its rating of Anglo Irish Bank Corp, and warned that it may further downgrade the rating to junk if the government does not guarantee bondholders against losses. Shares in M&T Bank (NYSE:MTB) dropped 7% after its merger talks with a unit of Banco Santander (NYSE:SAN) broke down. Those concerns weighed on the financial sector shares.

Meanwhile, rumors surfaced that Spain’s sovereign credit rating was facing a possible downgrade later this week.

Ahead of the opening bell, the DJIA futures are up 16 points, or 0.2%, to 10,766. Standard & Poor’s 500 index futures have added 1.50, or 0.1%, to 1,139.20. The Nasdaq 100 index futures are up 8 points, or 0.4%, to 2,015.25.

Stock Market News for September 28, 2010 – Market News

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