Stocks End Lower Despite bin Laden's Death, Earnings

The Bin Laden rally lasted all of three hours.

Stocks began climbing Monday morning after news of the death of the world's most wanted terrorist overnight. Strong earnings reports from Humana Inc. and other companies also pushed them higher.

But by lunchtime, the gains were gone. The major indexes wavered throughout the remainder of the day and closed slightly lower.

"As great as the news is, it doesn't have much to do with earnings or the economy," said Jack Ablin, chief investment officer at Harris Private Bank.

The Dow Jones industrial average fell 3.18 points to close at 12,807.36. The average of 30 stocks had been up as many as 65 points in morning trading.

President Barack Obama said late Sunday that bin Laden, the al-Qaida chief who masterminded the Sept. 11, 2001 attacks, had been killed by U.S. forces in Pakistan. The news lifted investors' mood when the market opened.

"It's a feel-good item," said Howard Silverblatt, senior index analyst at Standard & Poor's. "It gives closure to a lot people."

But Silverblatt expected the impact on markets to be temporary once traders shifted their focus to corporate profits and economic news.

Strong earnings over the last two weeks helped the Standard & Poor's 500 index reach its highest levels since the financial crisis on Friday, when it closed at 1363.61.

The S&P 500 index fell 2.39 points, or 0.2 percent, to 1,361.22. It had been up 7 points Monday morning. The Nasdaq composite fell 9.46 points, or 0.3 percent, to 2,864.08.

The dollar dropped against a basket of six major currencies -- the euro, Japanese yen, British pound, Canadian dollar, Swiss franc and Swedish krona -- for the eighth day straight. The dollar index sank to 72.72, its lowest point since July 2008.

Whole Foods Market Inc. fell 5 percent, making it the worst-performing stock in the S&P 500. A Jefferies analyst downgraded the company and said sales could stagnate as shoppers feel the pinch of higher gas prices.

Dish Network Corp., Chrysler Group LLC and Humana Inc. all reported strong earnings. Dish Network's first-quarter net income more than doubled, in part, because of a patent settlement with TiVo Inc. Its stock rose 16 percent.

Humana's profit rose 22 percent. The company benefited from more people enrolling in its Medicare plans. Its stock gained 0.5 percent.

The privately-held Chrysler reported its first profit since leaving bankruptcy two years ago thanks to higher sales.

Israeli drug maker Teva Pharmaceutical Industries Ltd. said it would buy Cephalon Inc. for $81.50 per share, or $6.8 billion. Cephalon's key drugs include the sleep disorder treatment Provigil and the cancer drug Treanda. Cephalon's shares rose 4 percent.

The Institute of Supply Management reported that manufacturing activity increased for the 21st month in April, though at a slightly slower pace than the month before. This was expected by economists. The Commerce Department also reported that builders started work on more projects in March after three straight monthly declines in construction spending.

Roughly three shares fell for every two that rose on the New York Stock Exchange. Trading volume was 4 billion shares.

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tmteefore

Uncle Raco you did it again. lol good post.

May 03 2011 at 11:22 PM Report abuse +2 rate up rate down Reply
Uncle Raco

It's a good thing all those Republican policies were in place to set the stage, otherwise the Navy Seals never would have had the mission. Really, Obama has been carrying through and expanding Republican foreign policy all along. Liberals would be totally lost if Republicans were not there to guide them along. Indeed, the best Ideas are Conservative ideas.

May 03 2011 at 9:42 PM Report abuse +3 rate up rate down Reply
Iselin007

AOL wants you to take a survey well they got the answers right here.

May 03 2011 at 6:19 AM Report abuse +2 rate up rate down Reply
Iselin007

Strange the column was hyping the stocks until everyone said they were going down then they changed their tune right quick.

May 03 2011 at 6:08 AM Report abuse +2 rate up rate down Reply
Iselin007

He should of hid at Walmart they would of thought he was just an assistant manager doing nothing all day.

May 03 2011 at 6:06 AM Report abuse +3 rate up rate down Reply
Iselin007

Osama probably posted on Huffington an since he was the only one they found him.

May 03 2011 at 6:04 AM Report abuse +2 rate up rate down Reply
Iselin007

Kind of nice not having to post on the Huffington site they really stank.

May 03 2011 at 6:03 AM Report abuse +4 rate up rate down Reply
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Obama 2012 he has my vote.

May 03 2011 at 4:35 AM Report abuse -7 rate up rate down Reply
1 reply to toosmart4u's comment
ackmedikeelu1

If a monkey ran for prez you would vote for it.

May 04 2011 at 9:03 AM Report abuse +2 rate up rate down Reply
kv37

Whenever you feel bad about his death, just remember those towers coming down.

May 03 2011 at 4:30 AM Report abuse +2 rate up rate down Reply