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Stocks recovered from an early dip but showed little direction in afternoon trading.
The NYSE composite and S&P 500 held fast, each with a less than 0.1% gain, and the Nasdaq with an equivalent loss, at 2:53 p.m. ET. The Dow sagged just over 0.1%. Volume remained weak: down 30% on the NYSE, 4% lower on the Nasdaq.
Book publishers and hotel operators were the best performing industry groups. Shares of the long-suffering Scholastic Corp. () soared on news of a $200 million stock repurchase plan. The Leisure-Hotels & Motels group rose more than 2% as Marriott International () and China-based Home Inns & Hotels Management () racked up solid gains. Residential and commercial builders, transportation stocks and makers of photography-related equipment suffered some of the worst hits.
Rising stocks beat out decliners by a fraction on the NYSE. Losers ran ahead of gainers on the Nasdaq, with few leading stocks sucked into declines.
Warnaco Group (), the apparel maker and owned of the Calvin Klein and Anne Cole brands, added 1.66 to 35.91. The gain, on average volume, pushed the stock to a 34-month high. The stock is 24% extended from a 29.06 flat base buy point after a breakout in May.
Smith International () popped 2.36 to 57.99.The 4% bump drove the oil and gas equipment and services operator’s shares into new high territory. The Oil & Gas-Machinery/Equipment industry group has logged increases in seven straight sessions.
Dawson Geophysical () rose 2.60 to 56.74. The 5%, average volume blip furthered Dawson’s rebound from its 50-day moving average. The stock was 40% above the 40.36 buy point after breaking out of a seven-week cup-shaped base in February, but remained 5% below its May 3 high.
1 p.m. update: NYSE, Nasdaq Stocks Level Off After Shanghai Dive
By ALAN R. ELLIOTT
Stocks hovered near the breakeven point just after midday, balancing Shanghai’s sharp downturn and weak factory orders on one side and a raft of merger and acquisition news on the other. Commerce Department data showing declining demand for cars, aircraft and boats nipped into transportation stocks, sending the Dow Transportation index down 0.5%.
The NYSE composite and the S&P 500 were up less than 0.1% at 12:53 p.m. ET, bouncing back after early losses. The Nasdaq and the Dow were both down by less than 0.1%. NYSE volume was down 38% from Friday’s level, compared to an 8% slip on the Nasdaq.
Oil and gas drillers, equipment makers and exploration and production industry groups edged higher after Dominion Resources () announced the sale of major pieces of its U.S. oil and natural gas operations in separate deals worth $6.5 billion. Oil prices also rose, gaining $1.16 per barrel in early-afternoon trading.
Cadence Design Systems () gapped up, gaining 1.51 to 24.41 after published reports said the company was considering buyout offers. The heavy-volume pop pushed the maker of automated circuitry design equipment’s stock up 7%. That broke shares above a 23.18 buy point after a pullback to the 10-week line.
Sun Hydraulics () added 2.21 to 45.04. The 5% move hoisted the stock further above its 10-week moving average following a breakout from a four-weeks-tight pattern in April. Shares were extended 62% above that breakout’s 27.81 buy point.
Fertilizer maker Terra Nitrogen () sprouted 5.12 to 91.72. The 6% move advanced the stock’s rebound from its 50-day moving average. It is the stock’s third pullback since breaking out of a long-term consolidation in February.
On the downside, Force Protection () lost 2.52 to 24.90. The 9% drop marked the third straight down day in heavy volume for the heavy vehicle maker. Shares are near their 10-week moving average, and 20% below their May 22 high.
11 a.m. ET update: Stocks were off session lows, but still sported losses Monday as a big drop in Chinese stocks offset news of more corporate deals.
At 10:40 a.m. ET, the small-cap S&P 600 fell 0.3%, the Nasdaq slipped 0.2%, and the S&P 500 eased 0.1%. Nasdaq volume was tracking 6% lower and NYSE was tracking 62% lower.
The Shanghai composite tumbled 8.3% Monday, the worse since an 8.8% drop Feb. 27, on fears that the Chinese government would take further action to curb speculation. Last week, China raised the transaction charge or stamp tax to 0.3% from 0.1%.
That news overshadowed a number of corporate deals. Flextronics () a maker of contract electonic devices, agreed to buy rival Solectron () for $3.6 billion.
Dominion Resources () said it would sell the majority of its U.S. oil and natural gas operations in two separate deals worth $6.5 billion.
Handheld computer maker Palm () agreed to sell a 25% stake in the firm for $325 million.
In economic news, factory orders rose 0.3% in April, below economists’ estimates of a 0.6% rise.
Transcend Services () gapped up and rallied 1.52, or 9%, to a multi-year high of 18.35. In late April, the provider of medical transcription services delivered a 650% surge in Q1 profit. The stock cleared a two-year consolidation in January and has sprung off its 10-week moving average on two occassions since then.
Cadence Design Systems () gapped above a 23.18 buy point of a six-week flat base. Shares ran up 1.56 or 7%, to 24.46. The New York Times reported that the software maker was in talks with at least two private equity firms regarding a sale of the company.
Apple () climbed 2.45 to 120.83 on fast trade. The company’s highly-anticipated iPhone device is set to hit store shelves on June 29. Apple has gained about 24% since passing a 96.93 buy point of a cup-with-handle pattern on April 26.
On the downside, Millicom International Cellular () dropped 2.39 to 89.83, pulling back from Friday’s 8% gain. The wireless communications provider was still about 9% past a 82.14 buy point.
TAT Technologies () headed further below its 50-day moving average. Shares fell 0.66 to 18.95. The aerospace components maker’s Accumulation/Distribution Rating has slumped to D from an A rating in February.