Wall Street stocks dipU.S. stocks drifted lower today, following big gains last week on expectations that European leaders would take action to calm the region's debt crisis.
By: Matthew Craft, Associated Press
NEW YORK — U.S. stocks drifted lower today, following big gains last week on expectations that European leaders would take action to calm the region's debt crisis.
The Dow Jones industrial average sank seven points to 13,069 shortly as of 1:30 p.m. Eastern. JPMorgan Chase led the Dow lower, falling 2 percent to $36.13.
U.S. Treasury Secretary Timothy Geithner meets separately with Germany's finance minister and the head of the European Central Bank, Mario Draghi, today. Draghi's pledge to do whatever was needed to protect the euro set off a market rally last week. The Dow rose back above 13,000 for the first time since May and is now up 1.5 percent for the month.
Hopes are high that Draghi will back up his words with action when the central bank meets Thursday, said David Brown, the CEO and chief market strategist at the research firm Sabrient. “I think that's the big story this week,” he said. “The market has really responded to his bold statement. I hope the ECB takes action. If they don't do anything, it's not going to be pretty.”
Investors are also looking toward the Federal Reserve's meeting this week. Many in the financial markets believe the Fed will take new steps to stimulate the economy in coming months. The Fed will release its statement on interest rate policy Wednesday afternoon.
Besides the Fed statement Wednesday and the ECB meeting Thursday, another potentially market-moving event is coming up on Friday, when the U.S. Labor Department releases its monthly employment survey. Economists expect that the unemployment rate will remain unchanged at 8.2 percent.
In other trading today, the broader Standard & Poor's 500 index fell one point to 1,384, while the Nasdaq dropped 11 points to 2,947.
The indexes had been creeping higher early in the day, then reversed course soon after a regional manufacturing report came in much weaker than expected. A survey of manufacturing by the Dallas branch of the Federal Reserve showed a steep drop in July. Economists had forecast a modest gain.
Two corporate deals announced early today pushed some stocks higher. Chicago Bridge & Iron Co. agreed to buy Shaw Group for $3 billion in cash and stock. Shaw jumped $14.73, or 55 percent, to $41.40.
Medical and industrial equipment maker Roper Industries said it plans to buy hospital software company Sunquest Information Systems for $1.42 billion. Roper also raised its earnings estimate for the year, a result of the pending merger and a stronger dollar. Roper gained 4 percent to $102.19. Sunquest is privately owned.
Among other stocks making big moves: