Archive for Thursday, May 6, 2004

Merger, Dell unable to rally markets

Investors continue to weigh Fed statement

May 6, 2004


— Wall Street, unable to shake a lethargy induced by interest rate worries, wobbled to a mixed finish Wednesday as investors shrugged off a $10.5 billion bank merger and a bullish upgrade of Dell Inc.

Those developments and a very upbeat reading of business activity in the services sector by the Institute for Supply Management helped keep shares afloat for most of the session, but persistent rate worries ultimately stifled the advance.

"The market rallied a bit on the ISM numbers, but it seems to be a subdued rally," said David Hegarty, head trader at Commerzbank Securities. "The interest rate scenario obviously has been hanging over our heads ... and that will keep pressure on the equity market."

The next market-moving data will be released Friday, with the Labor Department's April jobs report. Economists are forecasting an increase of 165,000 nonfarm payroll jobs. But last month's surprise of 308,000 new jobs has many second-guessing those estimates.

Among Wednesday's winners on the Dow, the Coca-Cola Co. was up 82 cents at $51.09 after naming a former top official for one of its bottlers as its new chairman and chief executive. The appointment of E. Neville Isdell to succeed retiring CEO Doug Daft ended months of speculation.

Charter One Financial Inc. soared $7.91, or 22 percent, to $43.86, after the Royal Bank of Scotland Group announced plans to purchase it for $10.5 billion through its Citizens Financial Group Inc. subsidiary. The combined entity would be one of the 10 largest banks in the United States.

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