Stocks on Monday slumped for the fourth day in a row, led by weakness in financial-services companies. Analysts blamed the continuing worry about the collectibility of so-called subprime mortgages.
On the other hand, Treasury securities advanced, sending interest rates lower, on the same concerns about housing and mortgages. As a result, the benchmark yield on 10-year Treasury bonds, a figure used to calculate many home mortgage rates, fell to its lowest level since early January.
The Dow Jones industrial average slipped 15.22 points, to 12,632.26. Chicago-based Boeing was the biggest contributor to the loss. The Government Accountability Office recommended cancellation of a $15 billion Boeing helicopter contract with the Air Force.
The Standard & Poor’s 500 index closed down 1.82, at 1449.37. The Nasdaq composite index shed 10.58, to 2504.52. The Russell 2000 small-company index lost 2.95, to 823.69.
Former Federal Reserve Chairman Alan Greenspan contributed to the gloom. Speaking to an audience in Hong Kong, Greenspan said the U.S. economic cycle has peaked and might turn into recession, Dow Jones reported.
Once again, buyout deals and rumors were major factors in trading. Texas utility TXU soared more than 13 percent after the company agreed to be acquired by private-equity firms. Dow Chemical rose more than 3 percent on speculation that it is a buyout target.
New York Stock Exchange trading volume reached 1.55 billion shares. Winning stocks outnumbered losers by a narrow margin. Nasdaq trading volume totaled 1.86 billion shares, as losers topped winners by nearly a 3-2 ratio.
Crude oil prices rose again, settling at $61.39 a barrel, up 25 cents, as traders speculated that the recent cold snaps have depleted oil inventories.
TREASURY AUCTIONS: Interest rates were unchanged at the weekly auctions of 3- and 6-month Treasury bills. The discount rate for 3-month bills was 5.03 percent, the same as at last week’s auction. The rate for 6-month bills was 4.95 percent, also unchanged.
LOCAL NEWS: Chicago-based PrivateBancorp boosted its quarterly dividend to 7.5 cents per share from 6 cents, payable March 30 to shareholders of record March 16. Shares rose 16 cents, to $38.22.
