By Dan Strumpf
U.S. stocks pared gains in afternoon trading, weighed by sliding
shares of telecommunications companies, as investors looked ahead
to a busy week of economic data.
The Dow Jones Industrial Average lost two points, or 0.1%, to
17808, reversing an early advance. The S&P 500 index tacked on
four points, or 0.2%, to 2067. The Nasdaq Composite Index added 32
points, or 0.7%, to 4745.
A decline in telecommunications shares weighed on the Dow, with
Verizon Communications Inc. shedding 1.5% after Citigroup Inc.
analysts downgraded the stock. Fellow Dow component AT&T lost
1.7%.
Despite those declines, traders reported subdued activity given
the coming Thanksgiving Day holiday. The meeting of the
Organization of the Petroleum Exporting Countries and early
readings on retailers' Black Friday results could give some
direction to stocks later in the week, they said.
The pan-European Stoxx Europe 600 index rose 0.1%, getting a
second-day lift after European Central Bank President Mario Draghi
on Friday said it was necessary to raise inflation in the eurozone
"without delay." Those remarks were widely interpreted as a sign
that the ECB could take further easing action to fight ultralow
inflation.
Elsewhere in the market, Dow component United Technologies fell
1.1% after the industrial conglomerate's chief executive
unexpectedly stepped down.
Chinese and Hong Kong stocks rallied in response to the surprise
interest-rate cut from the People's Bank of China, which was
announced Friday after most Asian stock markets had closed. The cut
was China's first to borrowing costs in more than two years and
boosted optimism about the growth outlook for the world's
second-biggest economy.
"China is recognizing that their growth rate is slowing, and
they're doing what they can to combat that through monetary
policy," said Michael Farr, president of Farr, Miller &
Washington, which manages about $1.1 billion. "Europe to me is
beginning to face...what looks like a reasonably certain recession,
and Draghi keeps stepping up to the plate."
Investors expect measured gains in stocks through the remainder
of the year, boosted by easy-money policies globally and signs of
steady economic improvement in the U.S. The Dow has gained nearly
11% and the S&P is up more than 14% over the last 12 months.
While the Fed is eyeing an increase in interest rates, other major
central banks are accelerating easing actions as they fight slowing
growth.
Mr. Farr said he has been looking to take profits on winning
stocks in his portfolio following strong gains this year, but he
said finding inexpensive stocks to take their place is a challenge.
"I can't find stuff that's cheap enough to buy," he said. "I'm
really struggling to stay invested."
Demand for haven U.S. government debt declined. The yield on the
10-year Treasury note, which moves inversely with its price, rose
to 2.322%.
In economic news, the Federal Reserve Bank of Dallas reported
solid factory activity this month. Later this week, investors will
watch for the second reading on third-quarter gross domestic
product, a report on consumer spending for October and the Federal
Reserve's preferred gauge of inflation.
"We've been trading on macro data points lately," said Brian
Fenske, head of sales trading at brokerage firm ITG. "Post
earnings, we revert back to macro data points, and that's what's
happening."
Investors are also likely to keep a close eye on a meeting of
OPEC set for Thursday for signs of how the cartel plans to respond
to the steep slide in oil prices. Tumbling crude prices have
knocked shares of U.S. energy companies in recent months.
In commodity markets, crude-oil futures turned higher, rising
0.4% to $76.78 a barrel. Gold futures edged higher to $1197.90 an
ounce.
Deal news attracted attention on Monday. Reinsurance firm
RenaissanceRe Holdings Ltd. agreed to buy Platinum Underwriters
Holdings Ltd. in a stock-and-cash deal worth more than $1.9
billion. The deal's per-share price of $76 represents a 24% premium
over Platinum's closing price on Friday. Shares of RenaissanceRe
fell 2.1% and those of Platinum Underwriters surged 21%.
Drug maker BioMarin Pharmaceutical Inc. said it agreed to pay up
to $840 million to buy Dutch company Prosensa Holding NV. Prosensa
is a biopharmaceutical company that currently has no market
products. The deal represents a bet that Prosensa will get
regulatory approval for a muscular dystrophy drug. Shares of
BioMarin gained 1.9%.
Write to Dan Strumpf at daniel.strumpf@wsj.com
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