Wall Street lacked direction after weak economic data and near record oil prices rattled investors. Tech stocks were the story of the day until a rebound from major financials stole the headlines.
In economic related news, the housing industry assessment index fell in June to match a record low set last December. Meanwhile the NY Empire State index, a regional manufacturing reading, fell to -8.7 from a prior reading of -3.2.
The Dow slipped 38.27, or 0.31 per cent to 12269.08, while the broader S&P 500 added 0.11, or 0.01 per cent to 1360.14. The NASDAQ rose 20.28, or 0.83 per cent to 2474.78.
NYMEX light crude for July delivery fell US25c to settle at US$134.61 a barrel after coming close to US$140 in early trade.
The NASDAQ was helped by a 6 per cent jump in the shares of Research in Motion after investors said that Nokia's new phone models would not pose a threat to RIMM's dominance of the business market.
Apple gained 2.6 per cent after a bullish forecast from RBC Capital Markets, which forecast sales of the company's iPhone would reach 14 million this year.
Among the Dow's major decliners, Verizon shares lost 2.9 per cent and AT&T fell 1.4 per cent after UBS cut its ratings on the stocks to neutral from buy, citing pressure from mobile competitors and the weak economy.
The biggest drop on the Dow was Coca-Cola, which fell 2.2 per cent on the back of concerns that floods in the Midwest would drive up prices of soda ingredient corn syrup. Rival Pepsico was also affected, falling 2.2 per cent.
American International Group lost footing after earlier gains, ending down 0.5 per cent. On Sunday, the world's largest insurer said that Martin Sullivan was leaving as chief executive, with chairman Robert Willumstad replacing him.
Meanwhile, Citigroup led blue-chip gains with a rise of 1.7 per cent. The market was also boosted by a 5 per cent gain in the shares of investment bank Lehman Brothers after CEO Richard Fuld took full responsibility for the company's first-ever quarterly loss of US$2.8 billion.
GE shares lost 0.6 per cent after JPMorgan cut its rating on the company to neutral from overweight, citing a rough environment for its business operations.
In merger related news, there were signs that Sirius Satellite Radio and XM Satellite Radio may be close to completing a 16 month long merger. Sirius gained 3 per cent and XM shares rose 4 per cent.
COMEX gold for August delivery rose US$13.20 to settle at US$886.30 an ounce.
UKmarkets
UK shares lost ground despite gains in mining and oil plays. Telcos, including index heavyweight Vodafone, were among the top drags on the British bourse.
The benchmark FTSE 100 edged 8.20, or 0.14 per cent lower to 5794.60.
Among telcos, Vodafone lost 2.1 per cent, while fixed line operator BT Group gave up 1.6 per cent.
Oil stocks gained ground as crude prices climbed to near US$140 per barrel. BP added 0.3 per cent and Royal Dutch Shell gained 0.7 per cent. Meanwhile, Cairn Energy climbed 1.1 per cent.
Material plays benefited from firmer metal prices and talk that Anglo American and Brazil’s Vale were looking to merge. Anglo American was up 4.6 per cent.
Elsewhere in the sector, Eurasian Natural Resources climbed 6.3 per cent on a broker upgrade, while Kazakhmys added 3.9 per cent. BHP Billiton picked up 0.7 per cent, while Rio Tinto bucked the trend to fall 0.5 per cent.
Consumer Staples Unilever and Cadbury both fell 2.9 per cent after UBS lowered its rating on the stocks to sell.
Among financials, Barclays climbed 3.5 per cent after it said it planned to raise funds by selling shares to new and existing shareholders. Barclays had gained as much as 12 per cent in intraday trade.
Elsewhere in the sector, HSBC was up 0.3 per cent, while Royal Bank of Scotland shed 0.5 per cent.
European markets
European shares backtracked on Monday, led by the continent’s financials. Like their British counterparts European food producers buckled following a UBS rating downgrade.
France’s CAC 40 slipped 24.56, or 0.52 per cent to 4657.74, while Germany’s DAX index shed 35.44, or 0.52 per cent to 6729.88.
Among the financials Banco Santander declined 1.6 per cent, Credit Suisse shed 0.5 per cent and Deutsche Bank was down nearly 1 per cent.
Meanwhile, Banco Popular fell more than 8 per cent after Mexican teleco Axtel denied reports its chief executive could buy a stake in the Spanish bank.
Food Producers dragged on the continent’s indices after UBS issued a downbeat report and downgraded many of the sector components. Nestle dropped 0.9 per cent, while Danone fell 2.8 per cent.
Looking to energy stocks, Total added 0.6 per cent and ENI was up 1.3 per cent.
Elsewhere, Netherlands listed semiconductor equipment maker ASMI climbed 8.9 per cent after rejecting a bid from US rival Applied Materials.
Japanese markets
Japanese stocks enjoyed a solid rally on Monday, buoyed by exporters that benefited from the yen’s weakness. Gains among other regional markets also helped lift investor sentiment in Japan.
The benchmark Nikkei 225 climbed 380.64, or 2.72 per cent to 14354.37.
Among exporters Kyocera jumped 5.6 per cent, while camera maker Canon added 2.9 per cent.
Elsewhere, Japan's largest auto battery maker GS Yuasa Corp jumped 10.6 per cent after the Nikkei business daily reported that its partner, Mitsubishi Motors, would work with France's PSA Peugeot Citroen on electric vehicles. Mitsubishi Motors added 2 per cent.
Meanwhile, NEC Tokin Corp, which has partnered with Nissan Motor in a lithium-ion battery project, rose 8.3 per cent. Nissan was up 2.2 per cent.
Other gainers included Tohoku Misawa Homes, which climbed 15.7 per cent on talk that it would receive new business following the recent earthquake in northern Japan.
Ueki Corp, a general contractor that specialises in disaster-recovery related work jumped 17.7 per cent.
Hong Kongmarkets
Hong Kong shares enjoyed a near 2 per cent rally, putting an end to a four-day losing streak. Blue chips rallied as investors snapped up bargains following the market’s recent slide.
The benchmark Hang Seng picked up 437.39, or 1.94 per cent to 22029.69.
China Mobile enjoyed a 2.4 per cent rally, bouncing back from last week’s 9 per cent slump.
Among the other mainland heavyweights, oil refiner Sinopec jumped 3.4 per cent, aided by Friday’s decline in crude prices. The company also benefited from talk that Beijing would reform the government set energy price policy.
Chinese financials and property firms also contributed to the day’s gains. Insurers China Life and Ping An climbed 2.9 per cent and 3.3 per cent respectively.
Property firms China Overseas Land & Investment rose 3.8 per cent and R&F Properties gained 5 per cent.
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