US stocks close mixed

Wall Street was mixed in an erratic session today after a flurry of merger news failed to erase investors’ concerns that a recent run-up has left US stocks overbought.

Monday’s merger agreements, including a deal by Freeport-McMoRan Copper & Gold to acquire Phelps Dodge for 26 billion, totalled more than 50 billion in activity.

While the deals indicate companies are optimistic about the future, investors appeared unconvinced about the health of the US economy and were more cautious than usual amid the spate of merger announcements.

The buyout news battled with a sense that stocks were due for a pullback after the major indexes rose more than 1% last week.

Matthew Smith, vice-president and portfolio manager at Smith Affiliated Capital, contends investors could be wary of sending stocks much higher and in many cases will simply try to hold their gains until the end of the year.

“I just don’t think right now it’s warranted to take more risk on, given the moves we’ve had. We might see trending sideways,” he said.

The Dow Jones industrial average was down 26.02, or 0.21%, at 12,316.54. Earlier in the session the Dow hit another trading high of 12,355.23.

Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index was down 0.70, or 0.05%, at 1,400.50, and the technology-heavy Nasdaq composite index rose 6.86, or 0.28%, to 2,452.72.