US blue chip stocks finished slightly lower on Monday, pulled down by a drop in the shares of American International Group Inc as a regulatory probe widened. But the Nasdaq got a lift from a 4 percent jump in Apple Computer Inc, which shot higher after UBS raised its price target on the stock. There was some caution before Federal Reserve Chairman Alan Greenspan's comments later this week on the economy and the pace of interest-rate increases going forward.
The Dow Jones industrial average slipped 4.88 points, or 0.05 percent, to finish at 10,791.13. The Standard & Poor's 500 Index inched up just 0.84 of a point, or 0.07 percent, to close at 1,206.14. The Nasdaq Composite Index advanced 6.25 points, or 0.30 percent, to end at 2,082.91.
The S&P 500 inched to a fresh high for 2005 while the Dow closed just a fraction lower than the 2005 high it hit on Friday.
Trading was moderate, with 1.29 billion shares changing hands on the New York Stock Exchange, below the 1.46 billion daily average for last year. About 1.64 billion shares were traded on Nasdaq, below the 1.81 billion daily average last year. Advancers outnumbered decliners on the New York Stock Exchange by about 9 to 7. Advancers and decliners were almost even on Nasdaq.
"Greenspan's comments later this week will be pored over very carefully," said Thomas McManus, equity strategist at Banc of America Securities.
"People will be especially interested to see expectations for growth and will be trying to garner some information about the pace of Fed tightening - when, if at all, will the Fed take a rest from its program of raising interest rates 25 basis points at every meeting?"
Greenspan will testify on the economy on Wednesday to the Senate Banking Committee and on Thursday to the House Committee on Financial Services. In the testimony, Greenspan will give the Fed's semi-annual report on monetary policy.
US Treasury debt prices were narrowly mixed on Monday ahead of Greenspan's testimony. The benchmark 10-year Treasury note rose 4/32 in price to 99-12/32, while its yield slipped to 4.08 percent from 4.09 percent on Friday.
Meanwhile, crude oil futures ended higher, with the March crude contract settling up 28 cents at $47.44 a barrel. High oil prices can weigh on stocks as they impact corporate profit margins and consumer spending.
Among advancing stocks, Apple Computer Inc, maker of the popular iPod music device, rose 4.2 percent, or $3.42, to $84.63. UBS on Monday raised its price target on the stock to $99 from $85 and said Apple's momentum was set to build throughout 2005. On Friday, Apple announced a stock split.
But AIG fell 2.2 percent, or $1.63, to $71.49 after it said it received new subpoenas from New York Attorney General Eliot Spitzer and the US Securities and Exchange Commission related to insurance products that might have helped companies smooth earnings.
Verizon Communications Inc slipped 12 cents, or just 0.3 percent, to $36.19 as it said it would buy long-distance telephone company MCI Communications Inc in a deal worth $6.75 billion - beating out a rival bid by Qwest Communications International Inc Qwest shares fell 4 percent, or 17 cents, to $3.98. MCI fell 4 percent, or 82 cents, to $19.93.
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