Stocks mixed ahead of Fed notes

Global markets are down after China moves to tame inflation. The Fed will release notes from its most recent policy meeting. Pfizer will buy King Pharmceuticals for $3.6 billion.

By TheStreet Staff Oct 12, 2010 8:04AM

TheStreetBy Melinda Peer, TheStreet


Updated at 1:18 p.m. ET


Stocks were mixed as investors showed caution ahead of the afternoon release of minutes from the last meeting of the Federal Reserve's policy-setting arm.


At 1:18 p.m. ET, the Dow Jones Industrial Average ($INDU) was down by 36 points, or 0.3%, at 10,974. The S&P 500 ($INX) was down by 1.8 points, or 0.2%, at 1,164. The Nasdaq ($COMPX) was rising by 5 points, or 0.2%, to 2,407.


The Federal Reserve's policymaking arm will release notes from its Sept. 21 meeting at 2 p.m. ET. The group left its key interest rate unchanged at the end of the meeting. Investors are eager to see what Federal Open Market Committee members said about measures they could take to boost the economy.


"Everyone is waiting for the minutes to get a better idea of what the Fed is thinking in terms of (quantitative easing)," said Jay Suskind, senior vice president at Duncan Williams. "There will certainly be some disagreement just because there are so many different points of view."


Japan's Nikkei dropped 2.1% and Hong Kong's Hang Seng fell 0.4% after China reportedly increased reserve requirements for six banks to damp lending and contain inflation. The FTSE in London was down 0.2%, and the DAX in Frankfurt lost 0.1%.

In company news, shares of Verizon (VZ) were dropping 2.2% to $32.32 after Bernstein Research downgraded the stock to “sell,” citing concerns about dividend growth. Verizon was the Dow's biggest laggard, followed by Wal-Mart (WMT).


American Express (AXP) was the benchmark's biggest gainer, adding 1.9%, followed by Alcoa (AA) and General Electric (GE).


Pfizer (PFE) agreed to buy King Pharmaceuticals (KG) for $3.6 billion. The deal values King at $14.25 a share, or a 40% premium over King's closing price of $10.15 a share Monday. Pfizer shares were down 0.5% to $17.29, while King shares were soaring 40% to $14.16.


After the market closes, Intel (INTC) will report third-quarter earnings. Analysts anticipate a profit of 50 cents a share, according to Intel shares were sliding 0.3% to $19.50.


Activist investor Carl Icahn bought an almost 10% stake in Dynegy (DYN) for $57.5 million, according to a regulatory filing. The move could incite a buyout battle with private equity player Blackstone Group (BX) over the energy company. Dynegy shares were up 0.4% to $4.77, while Blackstone shares were falling 0.4% to $13.46.


Entergy (ETR) said it's cooperating with the Justice Department on a civil investigation of competitive issues at divisions in several southern states. Entergy shares were losing 0.6% at $76.67.


Buyout firm KKR (KKR) has partnered with the Korean national pension system to buy a minority stake in Colonial Pipeline, a unit of Chevron (CVX). The deal is valued at close to $1 billion. KKR shares were up 2.5% to $11.25, while Chevron's shares are falling 1.1% to $82.77.


Johnson Controls (JCI) expects full-year earnings of $2.30 to $2.45 a share on sales of $37 billion, compared with a profit of $2.37 a share and sales of $36.27 billion that analysts had been projecting. Johnson Controls were down 0.9% to $31.35.


In commodity markets, crude oil for November delivery was shedding 51 cents to trade at $81.70 a barrel. The December gold contract, the most actively traded gold future, was losing $7.30 to $1,347.10 an ounce. 


The dollar was trading higher against a basket of currencies, with the dollar index up by 0.1%. The benchmark 10-year Treasury note strengthened 6/32, weakening the yield to 2.376%.


Kansas City Federal Reserve Bank President Thomas Hoenig is scheduled to discuss the economic outlook and monetary policy today at the National Association for Business Economics' annual meeting in Denver.


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[BRIEFING.COM] The major averages ended the midweek session with slim gains after showing some intraday volatility in reaction to the release of the latest policy directive from the Federal Open Market Committee. The S&P 500 added 0.1%, while the relative strength among small caps sent the Russell 2000 higher by 0.3%.

Equities spent the first half of the session near their flat lines as participants stuck to the sidelines ahead of the FOMC statement, which conveyed no changes to the ... More


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