(Updates to midmorning)
By Ellis Mnyandu
NEW YORK, April 28 (Reuters) - U.S. stocks were little
changed on Monday as financial shares fell on fears of more
dividend cuts and weak profits, but optimism about a proposed
$23 billion takeover in the confection sector cushioned the
market.
Record crude oil prices created another headwind for the
broad market, although energy shares benefited from a rise in
U.S. crude for June delivery to $119.93 a barrel.
Weighing heavily on the financial sector was a report from
Morgan Stanley cutting its profit forecasts on several U.S.
banks, including Bank of America Corp <BAC.N>, whose stock
declined nearly 1 percent.
In addition, Morgan Stanley said it expected more dividend
cuts in the sector and said that Well Fargo <WFC.N> and
Wachovia <WB.N> were among institutions that will need to raise
more capital to shore up their balance sheets.
Investor Warren Buffett added to the gloom after he told
CNBC television that the U.S. could be mired in a longer and
deeper recession than most people think.
"There's some risk that if this is a prolonged recession,
it might be too early to say that we're going to have a
sustainable advance in the stock market," said Steve Goldman,
market strategist at Weeden & Co in Greenwich, Connecticut.
The Dow Jones industrial average <> edged up 12.22
points, or 0.09 percent, to 12,904.08. The Standard & Poor's
500 Index <.SPX> inched up 2.84 points, or 0.20 percent, to
1,400.68. The Nasdaq Composite Index <> gained 6.06
points, or 0.25 percent, to 2,428.99.
But a proposed $23 billion acquisition of Wm Wrigley Jr Co
<WWY.N> and a billionaire's bid to increase a stake in Ford
Motor Co. <F.N> showed investors were still willing to put
money in areas that held promise.
Shares of Wrigley, the world's largest chewing gum maker,
jumped 23.3 percent to $76.98 on the NYSE after it agreed to be
bought by Mars Inc, maker of M&M's candy, for $23 billion. For
details, see [].
Mars said Buffett's Berkshire Hathaway <BRKa.N> is among
the parties providing the financing for the deal.
Shares of Ford rose 9.9 percent to $8.23 on the NYSE after
Kirk Kerkorian's Tracinda Corp said it intends to make a cash
tender offer for up to 20 million shares of common stock of the
automaker at a price of $8.50 per share. [].
Shares of Bank of America, the No. 2 U.S. bank, declined
0.9 percent, to $37.96 on the New York Stock Exchange, while
Wachovia shares slid 3.5 percent to $27.81. Shares of Well
Fargo declined 0.6 percent to $30.41.
On the Nasdaq, shares of Microsoft Corp <MSFT.O> declined
1.1 percent to $29.49 after Yahoo Inc <YHOO.O> let the deadline
for it to respond to the software maker's threat to take its
takeover bid for the Internet company directly to shareholders
pass with no new development.
Exxon Mobil Corp <XOM.N> climbed 0.5 percent to $92.89 on
higher crude.
(Editing by Kenneth Barry)
