Post Reply
1-1 of 1
(Updates to midmorning)
By Ellis Mnyandu
NEW YORK, April 28 (Reuters) - U.S. stocks were little changed on Monday as financial shares fell on fears of more dividend cuts and weak profits, but optimism about a proposed $23 billion takeover in the confection sector cushioned the market.
Record crude oil prices created another headwind for the broad market, although energy shares benefited from a rise in U.S. crude for June delivery to $119.93 a barrel.
Weighing heavily on the financial sector was a report from Morgan Stanley cutting its profit forecasts on several U.S. banks, including Bank of America Corp (BAC.N: Quote, Profile, Research), whose stock declined nearly 1 percent.
In addition, Morgan Stanley said it expected more dividend cuts in the sector and said that Well Fargo (WFC.N: Quote, Profile, Research) and Wachovia (WB.N: Quote, Profile, Research) were among institutions that will need to raise more capital to shore up their balance sheets.
Investor Warren Buffett added to the gloom after he told CNBC television that the U.S. could be mired in a longer and deeper recession than most people think.
"There's some risk that if this is a prolonged recession, it might be too early to say that we're going to have a sustainable advance in the stock market," said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut. The Dow Jones industrial average .DJI edged up 12.22 points, or 0.09 percent, to 12,904.08. The Standard & Poor's 500 Index .SPX inched up 2.84 points, or 0.20 percent, to 1,400.68. The Nasdaq Composite Index .IXIC gained 6.06 points, or 0.25 percent, to 2,428.99.