- The Washington Times - Monday, June 6, 2005

NEW YORK (AP) — Wall Street eked out a modest gain yesterday despite a dearth of economic news and a general lack of interest among stock traders. A flurry of multibillion-dollar merger deals did little to encourage buying as uncertainty over the economy prevailed.

Without any economic reports or corporate earnings to provide insights, investors’ questions about the economy — and whether its slowing growth will be aggravated by high oil prices — went unanswered, leaving many traders on the sidelines.

Wall Street’s concerns overshadowed the latest round of mergers and acquisitions, topped by Washington Mutual Inc.’s planned takeover of Providian Financial Corp. in the financial sector. The light volume and a small ratio between advancing and declining stocks illustrated the market’s malaise.

“There’s just not a lot out there that’s going to push this market around,” said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. “The problem we have here is that there’s just no economic data, nothing out there that will give us anything to really act on.”

The Dow Jones Industrial Average rose 6.06, or 0.06 percent, to 10,467.03.

Broader stock indicators closed narrowly higher. The Standard & Poor’s 500 index rose 1.49, or 0.12 percent, to 1,197.51, and the Nasdaq Composite Index gained 4.33, or 0.21 percent, to 2,075.76.

The Russell 2000 index of smaller companies was up 2.63, or 0.42 percent, at 622.94.

Crude oil futures trading has been awash in worry and speculation over the past two weeks, with the latest concern being the advent of the Atlantic hurricane season, which traders fear could hurt refining capacity in the South. Crude oil prices hit a six-week high earlier in the session, but gave back their gains later in the day. A barrel of light crude settled at $54.49, down 54 cents, on the New York Mercantile Exchange.

The bond market edged higher in late trading, with the yield on the 10-year Treasury note falling to 3.96 percent from 3.98 percent late Friday. The dollar fell against most major indexes, while gold prices were higher.

Many on Wall Street are waiting for Thursday, when Mr. Greenspan is scheduled to testify before Congress on the state of the economy.

“You got people taking a longer-term approach, waiting for the Fed. And in the meantime, we’re holding in there, which isn’t bad,” said Bill Groenveld, head trader for VFinance Investments. “I’m surprised we haven’t seen a healthy pullback after our rally here. We’re just drifting, but I’ll take this over an aggressive sell-off any day.”

While the spate of mergers would normally be a positive for stocks, much of the trading was limited to individual stocks, with the lack of trading interest leaving Wall Street unable to mount a rally.

Heading the list of merger deals, Washington Mutual was down $1.03 at $40.54 as the company announced a takeover of Providian for $6.45 billion in cash and stock, or $18.71 per share, that would solidify Washington Mutual’s position on the West Coast. Providian lost 33 cents to $17.63.

Real estate investment trust Catellus Development Corp. surged 12.8 percent, or $3.75, to $32.99 after Prologis Trust announced it would buy the rival trust for $3.6 billion in cash and stock and another $1.3 billion in assumed debt. The deal will create the world’s largest network of warehouses and distribution services. Prologis dropped $1.26 to $40.11.

E-Trade Financial Corp. climbed 25 cents to $12.65 after the Wall Street Journal reported that the online brokerage sweetened its unsolicited takeover bid for rival Ameritrade Holding Corp. by $500 million and also offered Ameritrade a larger stake in the combined company. The move comes as Ameritrade, which climbed 3 cents to $14.93, pursues a bid for Toronto-Dominion Bank’s TD Waterhouse division. Toronto-Dominion slipped 5 cents to $42.87.

Apple Computer Inc. Chief Executive Steve Jobs confirmed that the company would use Intel Corp. microprocessors in its Macintosh computers, ending a decade-long chip deal with IBM Corp. Apple lost 32 cents to $37.92, while Intel fell 16 cents to $27.17 and IBM dropped 79 cents to $75.

Advancing issues outnumbered decliners by nearly 4 to 3 on the New York Stock Exchange, where preliminary consolidated volume came to 1.52 billion shares, compared with 1.63 billion traded Friday.

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