NEW YORK Stocks slumped to a mixed finish Monday as the dollar posted its second day of gains over concerns that Europe is on the edge of another bailout.
Investors believe that Ireland may seek help from its fellow members in the European Union as its economy sputters. The dollar also spiked in May when Europe bailed out Greece. Irelands finances are under strain after the government bailed out five banks after the countrys real estate boom collapsed.
The rising value of the dollar, which hurts U.S. exports, resulted in stocks paring their gains late in the day. Stocks had risen for most of the day after a spike in corporate dealmaking and news that retail sales in October jumped to the highest level in seven months.
Consumer spending rose 1.2 percent last month thanks to higher demand for automobiles, the Commerce Department reported. The gain was nearly double what analysts were expecting. Shares of Ford Motor Co. rose 4.3 percent after the announcement.
Treasury prices fell on the stronger economic data and a backlash against the Federal Reserves recent bond-buying program intended to spur the economy. The price drop sent interest rates to their highest levels in more than three months. Bond yields and prices move in opposite directions.
Caterpillar Inc., the worlds largest construction machinery maker, said it would buy mining equipment maker Bucyrus International Inc. for $7.6 billion in cash, a 32 percent premium over the companys closing price Friday. Shares of Caterpillar rose 1 percent.
Data storage company EMC Corp. also announced that it had reached a deal to buy competitor Isilon Systems Inc. for $2.2 billion in cash. It is offering $33.85 per share, a 29 percent premium over its closing price Friday.
The push for mergers and acquisitions is a good sign for investors, said Uri Landesman, the president of Platinum Partners, a hedge fund in New York City. Its a statement that companies are moving out from under the bombshells of 2008 and 2009 and that they dont think there will be another disaster, he said.
Corporations are holding record amounts of cash on their balance sheets. Using that cash to buy rivals or to expand into new areas could be a sign that companies are less concerned about the possibility that the economy will slide into another recession soon.
The Dow Jones industrial average rose 9.39, or 0.1 percent, to close at 11,201.97. It had been up as much as 88 points earlier.
The broader Standard & Poors 500 index fell 1.46, or 0.1 percent, to 1,197.75, while the technology-focused Nasdaq composite index fell 4.39, or 0.2 percent, to 2,513.82.