US stocks ended slightly higher yesterday as mergers and acquisitions supported selected sectors, but investors pulled back from recent gains in some big-cap technology and bank shares.
The S&P 500 has risen for eight of the past 11 trading days, but there were signs of fatigue as investors grew cautious in advance of key employment data at the end of the week.
“The market is getting a little tired,” said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles. “The market is a little overbought and I can’t say it’s completely unexpected to see things take a little bit of a pause.”
Fertiliser maker CF Industries Holdings raised its hostile bid for Terra Industries, and Dow Chemical Co said it will sell one of its units to private equity firm Bain Capital Partners.
That helped boost sentiment a day after American Insurance Group announced a record-breaking deal to sell a major Asia insurance unit. More deal-making is a sign that the financial markets are normalising and the economy improving.
The Dow Jones industrial average gained 2.19 points, or 0.02 per cent, to 10,405.98. The Standard & Poor’s 500 Index added 2.60 points, or 0.23 percent, to 1,118.31. The Nasdaq Composite Index rose 7.22 points, or 0.32 per cent, to 2,280.79.
In another bright spot, Greece’s borrowing costs fell to their lowest level in weeks as its government is expected to announce new austerity measures to win European debt guarantees for the cash-strapped European Union member.
The Dow industrials closed just above breakeven as investors took profit, pushing the blue chip index back into negative territory for the year after it briefly turned positive earlier in the day.
Dow components International Business Machines fell 0.9 per cent to $127.42, Hewlett Packard lost 0.8 per cent to $51.12, while JPMorgan Chase fell 0.5 per cent to $41.62 and Bank of America lost 1.5 per cent to $16.46.
Some recent economic data has been lacklustre, with yesterday’s February sales figures from major US automakers adding to concerns. Ford shares fell 1.5 per cent to $12.22.