Dow Picks Up 9, Nasdaq Drops 4

NEW YORK (AP) — 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. Ireland’s finances are under strain after the government bailed out five banks after the country’s real estate boom collapsed.

The rising value of the dollar, which hurts U.S. exports, resulted in stocks paring their gains. A weaker dollar benefits companies like Caterpillar Inc and Boeing that rely heavily on exports.

Stocks had risen for most of the day following following a spike in corporate dealmaking and news that retail sales jumped to the highest level in seven months in October.

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 following the announcement.

Caterpillar, the world’s 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 company’s closing price on Friday. Shares of Caterpillar rose 0.9 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 on 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. “It’s a statement that companies are moving out from under the bombshells of 2008 and 2009 and that they don’t think there will be another disaster,” he said.

Corporations are holding records amount 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 that 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 & Poor’s 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.

Akamai Technologies Inc. fell 5.1 percent following a ratings cut by analysts at Oppenheimer. The company, which helps companies speed the delivery of applications and video on Web pages, has seen its shares rise more than 80 percent so far this year to make it one of the best performing stocks in the S&P 500.

In addition to Ireland’s debt woes, investors are also worried about international pushback on the Federal Reserve’s plan to buy $600 billion in Treasury bonds, which U.S. trading partners say will further weaken the dollar.

Overseas markets also rose. The Euro Stoxx 50, which tracks blue chip companies in Europe, gained 0.8 percent. China’s Shanghai Composite Index closed 1.0 percent higher.

Prices for government bonds fell, sending yields higher. The 10-year Treasury yield rose to 2.8 percent.