NEW YORK – Stocks ended mixed Monday as an early rally evaporated amid uncertainty over high oil prices and worries about pharmaceutical stocks.
The blue-chip Dow Jones industrial average (search) ended up 11.68 points, or 0.11 percent, to close at 10,661.60 and the Standard & Poor's 500 Index (search) was up 0.46 of a point, or 0.04 percent, to finish at 1,194.66. The Nasdaq Composite Index (search) lost 7.35 points, or 0.34 percent, to end at 2,127.85.
"As we move to the end of the year, people are holding their breath and will try to preserve whatever gains they can," said Jim Fehrenbach, head of Nasdaq trading at Piper Jaffray. "We're really not running into much selling, but the Santa rally has come and gone."
A drop in crude oil futures, which retreated after last week's large gains, fed large-cap buying. After climbing more than 5 percent last week, light crude was quoted at $45.65, down 63 cents, on the New York Mercantile Exchange (search).
The Dow was bolstered by gains in Honeywell International Inc. (HON) and Caterpillar Inc. (CAT), which are both heavy users of energy. Honeywell shares rose almost 1 percent or 27 cents to $35.63, while Caterpillar was up 11 cents at $94.35.
Wall Street welcomed the latest reading from the Conference Board's (search) index of leading economic indicators. The index, a forward-looking view of the economy, rose 0.2 percent in November, better than the 0.1 percent rise expected on Wall Street. The index had fallen 0.3 percent in October.
Some investors were betting that the good economic news would combine with Wall Street's traditional "Santa Claus" rally to produce gains through the next two weeks. Since 1972, the Dow has gained an average of 1.1 percent in the five days before Christmas and 0.99 percent in the five days afterward, according to Michael Sheldon, chief market strategist at Spencer Clarke LLC.
"You have a couple of things pulling the market in different directions," Sheldon said. "In general, the economy is doing pretty well, but the market is also somewhat overbought right now and ripe for profit taking. I would give the market the benefit of the doubt through the new year because of the way the markets rise around the holidays."
Retail sales caused worries among some. The Wall Street Journal reported on Monday that ShopperTrak (search) of Chicago estimated that retail sales on Saturday were down 7 percent to $6.7 billion compared with the comparable Saturday last year.
The Saturday before Christmas typically marks the busiest shopping day of the season. Holiday sales are critical because they can account for as much as one-quarter of a retailer's annual sales.
"No one's feeling great about retail and I think people are beginning to look to 2005, and if there is an emerging sentiment -- it's skeptical about the strength of the consumer in 2005, particularly in the absence of much more stimulus from Washington and higher energy prices," said Zachary Karabell, senior economic analyst, at Fred Alger Management, Inc.
Wal-Mart Stores Inc. (WMT) said on Saturday it still expects a 1 percent to 3 percent increase in December sales at its U.S. stores open at least a year as sales of general merchandise and winter items improved in the latest week. Wal-Mart shares ticked higher, rising 18 cents to $52.20 on the New York Stock Exchange.
Pfizer (PFE) said it will pull advertising for Celebrex until the seriousness of the drug's health risks, which include an increased chance of heart problems, can be determined. Celebrex and a related drug, Bextra, represent 10 percent of the Dow component's total sales, and analysts warned that Pfizer could fall further if forced to pull those drugs from the market.
After dropping more than 11 percent Friday, Pfizer lost $1.46, or 5.67 percent, to $24.29, its lowest close since Dec. 26, 1997. Other drug stocks were mixed, as Merck & Co. (MRK) fell 8 cents to $31.51, Eli Lilly & Co. dropped 72 cents at $55.30 and AstraZeneca PLC (AZN) gained 19 cents at $27.39.
The proposed $12 billion deal between Illinois utility Exelon Corp. and New Jersey utility Public Service Enterprise Group Inc. gave investors reason to be confident, since continuing merger and acquisition activity bodes well for the stock market. That led analysts to conclude that Wall Street's year-end rally still had momentum.
While the Exelon acquisition of PSEG still requires regulatory approval, investors were already celebrating the move. Exelon climbed $1.19 to $43.05, while PSEG (PEG) surged $3.29 to $50.56.
Symantec (SYMC) shares continued to fall after its agreement to buy Veritas Software Corp. (VRTS) last week. The stock has fallen about 27 percent since the deal was first reported. Symantec shares were off $1.33 at $24.04, while Veritas was down $1.30, or almost 5 percent, at $26.45.
Mortgage giant Fannie Mae (FNM) slid 89 cents to $69.42 after its board met Sunday to discuss a possible shakeup of its executive team in the wake of severe accounting discrepancies. No announcements were made after the meeting.
Sprint Corp. (FON) rose 17 cents to $24.84 after it gave its profit outlook for 2004 and into 2005, which were within Wall Street's estimates. The forecasts, however, did not include the impact of Sprint's $35 billion proposed merger with Nextel Communications Inc., or the proposed spinoff of its local business. Nextel added 18 cents to $29.98.
Pepsi Bottling Group Inc. (PBG) said its profits for 2004 should come in above Wall Street forecasts, but warned that profit growth for 2005 will slow. Pepsi Bottling was down 33 cents at $27.
Trading was active, with 1.4 billion shares changing hands on the New York Stock Exchange, matching the 1.4 billion daily average for last year. About 1.99 billion shares were traded on Nasdaq, above the 1.69 billion daily average last year.
On the NYSE, the number of stocks advancing was about equal to those on the decline. On Nasdaq, declining issues outnumbered advancers by a ratio of about 2-to-1.
The Russell 2000 index of smaller companies was down 2.05, or 0.3 percent, at 640.03.
Overseas, Japan's Nikkei stock average rose 0.23 percent. In afternoon trading, Britain's FTSE 100 was up 0.73 percent, Germany's DAX index climbed 0.7 percent, and France's CAC-40 gained 0.51 percent.
Reuters and the Associated Press contributed to this report.