Stocks drift lower on Wall Street; Shaw soars

By MATTHEW CRAFT,AP Business Writer Updated at 2012-07-30 16:28:38 +0000


NEW YORK (AP) — U.S. stocks drifted lower Monday, following big gains last week on expectations that European leaders would take action to calm the region's debt crisis.

The Dow Jones industrial average is down 20 points to 13,055 shortly after noon. JPMorgan Chase led the Dow lower, falling 2 percent to $36.13.

U.S. Treasury Secretary Timothy Geithner meets separately with Germany's finance minister and the head of the European Central Bank, Mario Draghi, on Monday. Draghi's pledge to do whatever was needed to protect the euro set off a market rally last week. The Dow rose back above 13,000 for the first time since May and is now up 1.4 percent for the month.

Hopes are high that Draghi will back up his words with action when the central bank meets Thursday, said David Brown, the CEO and chief market strategist at the research firm Sabrient. "I think that's the big story this week," he said. "The market has really responded to his bold statement. I hope the ECB takes action. If they don't do anything, it's not going to be pretty."

Investors are also looking toward the Federal Reserve's meeting this week. Many in the financial markets believe the Fed will take new steps to stimulate the economy in coming months.

In other Monday trading, the broader Standard & Poor's 500 index fell three points to 1,383, while the Nasdaq dropped 12 points to 2,946.

The indexes had been creeping higher early Monday, then reversed course soon after a regional manufacturing report came in much weaker than expected. A survey of manufacturing by the Dallas branch of the Federal Reserve showed a steep drop in July.

Two corporate deals announced early Monday pushed some stocks higher. Chicago Bridge & Iron Co. agreed to buy Shaw Group for $3 billion in cash and stock. Shaw jumped $13.55, or 51 percent, to $40.25.

Medical and industrial equipment maker Roper Industries said it plans to buy hospital software company Sunquest Information Systems for $1.42 billion. Roper also raised its earnings estimate for the year, a result of the pending merger and a stronger dollar. Roper gained 5 percent to $103.60. Sunquest is privately owned.

Supermarket operator Supervalu rose 4 percent to $2.06 after the company announced that it would oust its CEO. Earlier this month, the Minneapolis company reported weaker sales and profits and suspended its dividend. Supervalu also said it may put itself up for sale.