Stocks dip as credit worries persist By MADLEN READ, AP Business Writer

Stocks dip as credit worries persist By MADLEN READ, AP Business Writer
54 minutes ago



NEW YORK - Stocks fluctuated but showed some signs of stability Monday as Wall Street, still anxious that a credit crunch will crimp U.S. growth, struggled to recoup some of last week's steep losses.

ADVERTISEMENT

Some strong earnings reports and merger-and-acquisition activity appeared to steady the market, which is coming off the Dow Jones industrial average's and Standard & Poor's 500 index's biggest weekly drops in five years. The Dow has fallen about 5 percent since closing at a record of 14,000.41 on July 19, caving under worries about a shakier lending climate.

Health benefits provider Humana Inc. and meat producer Tyson Foods Inc. both reported better-than-expected quarterly profit gains, while HSBC Holdings PLC, Europe's largest bank by market value, said earnings for the first half of the year rose 25 percent.

And in a sign that dealmaking hasn't yet been stanched by debt aversion, industrial equipment manufacturer Ingersoll-Rand said it's selling its Bobcat earth-moving division and two other units to Korea's Doosan Infracore for $4.9 billion.

But not all of Monday's news was positive: China tightened its credit again by ordering banks to hike their reserves, and RadioShack Corp. posted a 15 percent decline in sales.

The market fluctuated between positive and negative territory Monday, indicating that a high level of nervousness remains on Wall Street, said Kim Caughey, equity research analyst at Fort Pitt Capital Group. "The mythical investor vascillates between fear and greed," she said, noting that she regards last week's plunge as an opportunity to buy, albeit selectively.

By late morning, the Dow fell 22.11, or 0.17 percent, to 13,243.36, after rising in earlier trading. On Thursday and Friday, the Dow fell a total of 585 points.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 1.36, or 0.09 percent, to 1,457.59, and the Nasdaq composite index fell 4.01, or 0.16 percent, to 2,558.23.

Bonds fell modestly, and the 10-year Treasury note's yield edged up to 4.78 percent from 4.77 percent late Friday. A week ago, the 10-year note's yield was at 4.95 percent, but it has since sunk as investors sought safe assets during the stock market's plunge.

Ingersoll Rand rose $2.14, or 4.5 percent, to $50.28 after saying it would sell its Bobcat unit.

After reporting profit rises, Humana rose 90 cents to $65.71; Tyson gained 26 cents to $21.67; and in London trading, HSBC rose 2.2 percent.

RadioShack Corp. dropped $3.30, or 12 percent, to $25.50, even though the electronics retailer swung to a second-quarter profit from a loss a year ago.

In other corporate news, Dow component Verizon Communications Inc. posted a rise in second-quarter profit that met expectations, and said Verizon Wireless, its joint venture with Vodafone Group PLC, will buy Rural Cellular Corp. in a deal worth about $757 million.

Verizon fell 75 cents to $41.25, and Rural Cellular jumped $10.88, or 34 percent, to $42.69.

High energy prices, which contribute to inflation, remain a concern for investors. Oil futures fell 42 cents to $76.60 a barrel on the New York Mercantile Exchange. On Friday, they finished a penny away from the record close of $77.03 reached July 14, 2006.

The dollar fell against most other major currencies. Gold prices rose.

The Russell 2000 index of smaller companies — which is now in negative territory for the year — fell 1.33, or 0.17 percent, to 776.50.

Advancing issues outnumbered decliners by about 8 to 7 on the New York Stock Exchange, where volume came to 560.4 million shares.

In Asian trading, Japan's Nikkei stock average rose 0.03 percent, Hong Kong's Hang Seng index rose 0.8 percent, and China's Shanghai Composite Index jumped 2.2 percent to a new record.

In European trading, Britain's FTSE 100 was up 0.28 percent, Germany's DAX index was up 0.17 percent, and France's CAC-40 was up 0.33 percent.

___

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com