An early struggle for stocks

[notiCIas]

An early struggle for stocks

GM news, Univision deal lend support but investors hang tight after readings on housing, consumer confidence.
June 27 2006: 10:14 AM EDT


NEW YORK (CNNMoney.com) -- Upbeat news from General Motors and more corporate mergers weren't enough to help stocks hold onto slim early gains Tuesday.

The Dow Jones Industrial average (up 1.39 to 11,046.67, Charts) was flat after rising modestly at the open and the broader Standard & Poor's 500 (up 2.07 to 1,252.63, Charts) index was also little changed about 40 minutes into the session.

The Nasdaq composite (up 3.39 to 2,137.06, Charts) edged higher.

Shares of Dow component General Motors (Charts) rose nearly 2 percent after the world's largest automaker announced late Monday that 35,000 of its hourly employees had accepted a buyout to leave the company.

The participation rate allows the embattled automaker to raise its cost-cutting target by $1 billion to $8 billion.

In addition, 12,600 hourly employees agreed to retire or leave bankrupt auto parts market Delphi, which could reduce the risk of a crippling strike at Delphi.

In other corporate news, Univision Communications (Charts) agreed to be bought by a group of private equity firms and media mogul Haim Saban for $13.7 billion.

The purchase price values the company at $36.25 a share, a 13 percent premium over Monday's closing price, although below the price some investors had hoped when the company was put up for sale.

The deal comes on the heels of a spate of mergers in the mining, steel and consumer healthcare sectors announced Monday.

On the economic front, existing home sales fell last month while consumer confidence crept higher.

A report Monday showed new home sales came in with an unexpected gain.

Investors are also awaiting this week's Federal Reserve meeting, which starts Wednesday.

Fed policy-makers are all but certain to raise interest rates another quarter-percentage point at their two-day meeting, but investors will be focusing on the central bank's statement for clues to how much further rates may rise.

Another hike would bring the target for the Fed's key short-term rate to 5.25 percent and mark the 17th straight increase in two years.

U.S. light crude oil for August delivery rose 50 cents to $72.30 a barrel.

COMEX gold for August delivery added $4.30 to $592 an ounce.

Treasury prices were higher, lowering the yield on the benchmark 10-year note to 5.20 percent from 5.22 percent late Monday. Bond prices and yields move in opposite directions.

In currency trading, the dollar edged lower versus the euro and the yen.

In global trade, major markets closed mixed in Asia. Major European markets were also mixed in early trading.