By Robert Holmes
TheStreet.com Staff Reporter
5/14/2007 5:00 PM EDT
Big buyout news in the automotive sector helped propel the Dow Jones Industrial Average to gains Monday, but tech stocks lost ground in a shaky session on Wall Street.
The Dow clawed back from a midsession selloff to rise 20.56 points, or 0.15%, to 13,346.78. The blue-chip average fell by as many as 29 points before rebounding.
The S&P 500 slipped 2.70 points, or 0.18%, to 1,503.15. The Nasdaq Composite shed 15.78 points, or 0.62%, to 2546.44, pressured by a 2.5% decline in Yahoo! (YHOO - Cramer's Take - Stockpickr - Rating).
"The markets look like they're running out of gas, at least on a short-term basis," said Michael Sheldon, chief market strategist with Spencer Clarke LLC. "Technology stocks never really saw too much buying, and it appears that some profit-taking has started to build up."
Phillip Roth, chief technical market analyst with Miller Tabak, said it was encouraging that the market didn't tumble further after the Dow touched its low of the day.
"The early weakness was not followed by any accelerations, so we didn't really see a big price loss," he said. "The relatively poor action in small stocks continues. The market is hanging on, but there's deterioration. We're trying to make progress until we get a much weaker message."
Once again, a new week started with a big private-equity deal. In the latest one, Germany's DaimlerChrysler (DCX - Cramer's Take - Stockpickr - Rating) agreed to sell an 80% stake in its Chrysler Group unit to private-equity firm Cerberus Capital Management.
The Chrysler Group buyout, worth $7.4 billion, unravels the 1998 mega-merger of Daimler-Benz and Chrysler, the No. 3 U.S. automaker. Shares of DaimlerChrysler gained 2.6% and finished at $84.12, while Ford (F - Cramer's Take - Stockpickr - Rating) added 4.1% and General Motors (GM - Cramer's Take - Stockpickr - Rating)jumped 3.9%.
Elsewhere in Germany, Merck KGaA's generic-drug business will be acquired by Mylan Laboratories (MYL - Cramer's Take - Stockpickr - Rating) for 4.9 billion euros ($6.63 billion). Mylan beat out Teva Pharmaceutical (TEVA - Cramer's Take - Stockpickr - Rating) in the deal. Mylan tumbled 12.1% to $19.70, while Teva tacked on 0.1% at $39.98.
In the health care sector, shares of Viasys (VAS - Cramer's Take - Stockpickr - Rating) surged 36.9% to $43.18 after Cardinal Health (CAH - Cramer's Take - Stockpickr - Rating) said it will purchase the company in a deal worth $1.5 billion. The per-share price of $42.75 values Viasys at a 35% premium over Friday's closing price.
About 2.62 billion shares changed hands on the New York Stock Exchange, with decliners beating advancers by a 2-to-1 margin. Volume on the Nasdaq reached 1.96 billion shares, as winners outpaced losers 2 to 1.
Many subsector indices finished with losses. The Amex Gold Bugs Index slumped 2%, the Philadelphia/KBW Bank Sector Index finished down 0.6%, and the Philadelphia Semiconductor Sector Index fell 0.1%.
The Amex Oil Index was one of few advancers, finishing with a gain of 0.4%.
While U.S. indices finished mixed last week, Friday's session saw a bounce-back from the worst decline in two months. The Dow Jones Industrial Average closed Friday up 111.09 points, or 0.84%, to 13,326.22. The S&P 500 was better by 14.38 points, or 0.96%, at 1505.85, and the Nasdaq added 28.48 points, or 1.12%, at 2562.22.