Stocks open flat following strong gains
EmptyNEW YORK -- Stocks opened largely flat Monday as investors digested the market's huge gains of last week and received news of a potential big telecom deal.
Wall Street's move sideways was not surprising after last week's record-setting rally. But investor sentiment got a modest boost from renewed talk of acquisition activity, which has been a big driver of the stock market's gains in the past year. Vodaphone Group PLC denied a report by the Financial Times that it is weighing whether to make a huge $160 billion bid for Verizon Communications Inc. The newspaper cautioned that Vodaphone has yet to approach Verizon. Vodaphone, the report said, would pursue the deal to obtain full ownership of Verizon Wireless, which Vodaphone and Verizon now own jointly.
In a much more modest but confirmed deal, restaurant chain operator IHOP Corp. said it would acquire Applebee's International Inc. for about $1.9 billion.
In morning trading, the Dow Jones industrial average rose 17.07, or 0.12%, to 13,924.32.
Broader stock indicators were little changed. The Standard & Poor's 500 index slipped 0.83, or 0.05%, to 1,551.67, and the Nasdaq composite index slipped 2.73, or 0.10%, to 2,704.27.
On Monday, light, sweet crude futures rose 8 cents to $74.01 in premarket electronic trading on the New York Mercantile Exchange.
The dollar was mixed against other major currencies and continued to hover near its record lows against the euro. Gold prices fell.
The buyout news moved some stocks Monday, with Verizon increasing $1.28, or 3.1%, to $43.04. Vodaphone fell 28 cents to $33.24. Meanwhile, Applebee's rose 39 cents to $24.77, while IHOP rose $4, or 7.1%, to $60.25.
Stocks showed little reaction to the New York Federal Reserve's Empire State Manufacturing Survey that found regional manufacturing activity continued to improve in July.
Last week's run-up came ahead of a flurry of quarterly results -- 11 of the 30 companies that make up the Dow Jones industrials are due to report this week -- and in advance of key readings on inflation.
Forecasts from companies should help indicate whether they can continue to put up solid profit growth as pricing pressures fluctuate, in part because of forces such as rising oil prices.
In other corporate news, McDonald's Corp. rose 26 cents to $52.12 after predicting its second-quarter earnings before charges will top Wall Street's forecasts.
Mattel Inc. rose 64 cents, or 2.4%, to $27.17 after reporting its second-quarter earnings rose 15% as increased sales global of its Barbie dolls and Hot Wheels toy cars made up for soft U.S. sales.
Ford Motor Co. rose 2 cents to $8.99 after denying various reports that it is in talks to sell its Volvo division.
Royal Philips Electronics NV, the maker of medical and lighting equipment, fell 51 cents to $44.07 after reporting its second-quarter net profit rose following the sale of its stake in a Taiwanese semiconductor company. The company also said, however, that currency exchange rates hurt sales.
In Asia, Japan's Nikkei stock average finished flat. Hong Kong's Hang Seng Index fell 0.63%, while the often-volatile Shanghai Composite Index fell 2.36%.
In afternoon trading, Britain's FTSE 100 fell 0.47%, Germany's DAX index fell 0.17%, and France's CAC-40 fell 0.14%.