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U.S. stocks higher, Facebook disappoints; Dow Jones up 0.43%

Published 05/21/2012, 09:45 AM
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Investing.com - U.S. stocks were higher on Monday, although ongoing concerns over the handling of the debt crisis in the euro zone persisted following a highly watched summit of G8 nation leaders over the weekend.

During early U.S. trade, the Dow Jones Industrial Average rose 0.43%, the S&P 500 index added 0.44%, while the Nasdaq Composite index gained 0.43%.

Market sentiment found support after a weekend summit of the G8 nations saw leaders affirm that they want Greece to remain in the euro zone and pledge to take measures to shore up growth in their economies.

But investors remained cautious after leaders failed to reach an agreement on how to calm market turmoil stemming from the crisis in the region.

Concerns over political turmoil in Greece eased somewhat after opinion polls indicated that pro-bailout party, New Democracy was leading the polls ahead of fresh elections, due to be held on June 17.

Uncertainty over the outcome of the elections has sparked fears over Greece’s ability to honor its financial commitments and its possible exit from the euro zone.

Shares in Facebook plunged 8.09%, well below its IPO price of USD38 a share on its second day of trading. The social networking giant's IPO drew the largest volume in market history but its gains Friday were muted, disappointing investors who had hoped for a rally that would brighten the mood in what has been a gloomy month for equity markets.

Meanwhile, Yahoo shares added 0.52% on reports Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40% stake in his Alibaba Group from the U.S. Internet company for USD7.1 billion, in a deal that moves the Chinese e-commerce leader closer to a public listing.

In the tech sector, Apple also saw shares jump 1.31%, as the company was preparing to go head to head against Samsung Electronics later Monday in U.S. court-directed mediation over a dispute in which the iPhone maker claims the Korean firm "slavishly" copied some of its products.

Elsewhere, Cooper Industries surged 24.73% after Eaton said it will acquire the electrical equipment maker for USD11.8 billion in cash and stock.

Also in corporate news, U.S. provider of kidney dialysis services DaVita, whose biggest shareholder is billionaire Warren Buffett’s Berkshire Hathaway, tumbled 2.47% after agreeing to pay about USD4.42 billion in cash and stock to acquire HealthCare Partners, continuing an international spending spree on providers of medical care.

Among earnings, Lowe's plummeted 10.08% after the home-improvement retailer slashed its fiscal-year earnings outlook, adding that demand has slowed, while Campbell Soup retreated 1.59% after saying it topped earnings expectations but left its full-year guidance unchanged.

Across the Atlantic, European stock markets were higher. The EURO STOXX 50 eased up 0.08%, France’s CAC 40 climbed 0.49%, Germany's DAX advanced 0.84%, while Britain's FTSE 100 rose 0.62%.

During the Asian trading session, Hong Kong's Hang Seng Index dipped 0.55%, while markets in Japan’s Nikkei 225 Index added 0.25%.

Markets were looking ahead to a first meeting between German Finance Minister Wolfgang Schaeuble and his newly appointed French counterpart, Pierre Moscovici, later in the day, as European Union leaders prepared for Wednesday’s summit meeting.


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