US stocks end in red after bin Laden death
NEW YORK—US stock markets dipped Monday as investors focused on weakness in the economy as euphoria about the US slaying of Al-Qaeda chief Osama bin Laden faded.
The Dow Jones Industrial Average slipped 3.18 points (0.02 percent) to finish at 12,807.36.
The Nasdaq Composite dropped 9.46 points (0.33 percent) to 2,864.08, while the broad-based S&P 500 index retreated 2.39 points (0.18 percent) to 1,361.22.
All three indices had opened the session with gains after a late-night announcement Sunday by the White House that US forces had killed the Islamic extremist behind the September 11, 2001 attacks, at his secret compound in Pakistan.
“A lackluster report on manufacturing took some of the wind out of the bullish sails, with stocks dipping their toes in the red around midday” and closing with modest losses, said Andrea Kramer at Schaeffer’s Investment Research.
S&P Indices analyst Howard Silverblatt had predicted the effect of bin Laden’s death on the markets would be short-lived.
“Overall, the impact to the US markets, oil, and the dollar should be a short-term positive, with world and US reaction to any forward events, or lack of events, more lasting,” he said in a report.
“As bad as it is to rejoice in anyone’s death, the close of this chapter will bring a feeling of relief to the markets, potentially reduce inherent risk costs to oil, and give the market — and us all — some closure,” he said.
In a week capped Friday with the keenly awaited April jobs data, investors weighed news that US manufacturing growth slowed amid price pressures but was still strong.
The US manufacturing sector expanded in April for the 21st month, the Institute for Supply Management said.
The ISM manufacturing index, based on a survey of purchasing managers, stood at 60.4 percent in April, showing activity slowing from 61.2 percent in March.
But it was the fourth consecutive month of growth above 60.0 percent in manufacturing, the sector driving the US economic recovery from the worst recession in decades.
In merger and acquisition news, Israel’s Teva Pharmaceutical Industries, the world’s largest generic drug maker, announced the takeover of biopharma firm Cephalon in a $6.8 billion deal, weeks after Cephalon rejected a hostile $5.7 billion bid from Canadian firm Valeant.
Teva offered $81.50 in cash for all of Cephalon’s shares outstanding, representing a 39 percent premium on Cephalon’s share value at the end of March, before Valeant launched its takeover bid.
Teva shares were up 3.4 percent at $47.27, while Cephalon’s surged 4.0 percent to $80.11.
The bond market firmed. The yield on the 10-year Treasury fell to 3.27 percent from 3.30 percent late Friday, while that on the 30-year bond slipped to 4.39 percent from 4.41 percent.
Bond yields and prices move in opposite directions.
