NEW YORK (AP) — Stocks barely budged yesterday, finishing mixed as interest rate worries and a legal setback for Merck & Co. countered momentum from a possible multibillion-dollar acquisition by ConocoPhillips Co.
Forecasts for midweek snowstorms in the Northeast catapulted energy prices on anticipation for increased demand, although Organization of the Petroleum Exporting Countries (OPEC) said it will keep producing oil at current record levels before considering whether to scale back next year. A barrel of light crude surged $1.91 to settle at $61.30 on the New York Mercantile Exchange.
The market got an early boost from merger activity, while an upbeat analyst report on Google Inc. paced the technology sector. There was little economic news to guide the market yesterday, but data on monthly retail sales, price inflation and manufacturing are scheduled for later this week.
Instead, Wall Street awaited the Federal Reserve’s decision on interest rates today. While the Fed is expected to lift rates by a quarter percentage point to 4.25 percent, traders are hoping for indications the rate increases will end soon. Recent economic strength has fed worries that the central bank might extend the series of increases.
“People are waiting to see what kind of change in policy language is going to accompany that statement,” said Russ Koesterich, senior portfolio manager at Barclays Global Investments. “The question is, if the Fed is approaching [a neutral stance], how will its policy change in 2006?”
Mr. Koesterich said he believes the Fed is near the end of its rate tightening, which should help stocks. But if there’s “evidence of an increase in core inflation, it’s reasonable to assume that the Fed is going to continue hiking rates,” he said.
The Dow Jones Industrial Average lost 10.81, or 0.1 percent, to 10,767.77.
Broader stock indicators gained ground. The Standard & Poor’s 500 Index rose 1.06, or 0.08 percent, to 1,260.43, while the Nasdaq Composite Index advanced 4.22, or 0.19 percent, to 2,260.95.
Bond prices declined, with the yield on the 10-year Treasury note climbing to 4.55 percent from 4.53 percent late Friday.
The Energy Department yesterday said crude oil is projected to remain well above $50 a barrel over the next 20 to 25 years because it does not expect OPEC to pump as much oil as previously planned. The report, however, also forecast a sharp price decline for natural gas, which added 52.9 cents to settle at $14.841 per 1,000 cubic feet on the NYMEX.
Rising gasoline and heating-fuel prices again clouded the outlook for the key holiday shopping season, which Mr. Koesterich said remains a foremost concern on Wall Street. Wal-Mart Stores Inc. quelled some fears by reporting that its December same-store sales are in line with estimates, sending shares up 60 cents to $48.68.
ConocoPhillips is nearing a deal to acquire oil and gas producer Burlington Resources Inc. for more than $30 billion, the Wall Street Journal reported yesterday. Together, the companies’ annual revenue would be more than $211 billion. ConocoPhillips fell $1.82 to $61.25, while Burlington surged $6.41 to $82.50.
The Journal also reported that apparel designer Tommy Hilfiger Corp., which put itself up for sale in August, could have three takeover offers by Friday. Hilfiger lost 15 cents to $17.75.
Movie studio Paramount Pictures, a unit of Viacom Inc., agreed to buy rival DreamWorks SKG Inc. in a $1.6 billion deal involving $775 million in cash and $825 million of assumed debt. General Electric Co.’s NBC Universal had been in talks with DreamWorks for the past nine months. Viacom was up 29 cents at $34.71, and GE rose 2 cents to $35.55.
AT&T Inc. reached a tentative labor contract covering more than 11,000 of its workers, who were planning to strike if a deal had not been made by midnight Saturday. AT&T nonetheless lost 4 cents to $24.86.
Google rose $3.41 to $412.61 after Credit Sussex First Boston raised the company’s price target by $75 to $475, citing expectations for accelerating revenue in the online advertising market.
Advancing issues led declines by 17 to 16 on the New York Stock Exchange, where preliminary consolidated volume of 1.92 billion shares matched the number of shares that changed hands Friday.
Overseas, Japan’s Nike stock average jumped 2.17 percent. Britain’s FT 100 slipped 0.29 percent, Germany’s DA Index gained 0.36 percent and France’s CA-40rose 0.26 percent.