News That Moved Monday's Market

by: Roy Mehta

U.S. Markets

Dow +57.88 (+0.48%)
Nasdaq +15.21 (+0.66%)
S&P 500 +7.84 (+0.59%)

News That Moved the Market

Markets Up Despite Downward Pressure From AIG. Major indices fell after the open on news that American International Group (AIG, -11.7%) was being questioned by its auditor on how the insurer prices some of its derivatives, mainly CDOs. Fitch Ratings announced it may cut AIG's AA rating as a result of the disclosure. Despite the negative news, every sector besides financials and healthcare, which lost only 0.1%, ended higher. However, volume in general was light, making many believe that the sellers simply took the day off, rather than buyers came into Monday with great conviction.

BofA and Chevron Join The Dow Industrials. The Dow Industrial Average will add Bank of America (BAC, -0.1%) and Chevron (CVX, +1.5%) and drop Altria (MO, -0.9%) and Honeywell (HON, -0.3%). The new companies were inserted to reflect the increased importance of financials and oil industrials in the world economy. The additions will not get the same bounce as companies added to the S&P 500 because there are simply more portfolios and funds structured around the S&P 500 compared to the Dow.

Oil Finishes Higher On Supply Concerns. Crude jumped 2.1% on news a refinery in Delaware had to be shutdown because of weather conditions. In addition, Venezuelan president Hugo Chavez threatened to stop selling oil to the U.S. after the Venezuelan assets were ordered frozen by a judge following a legal altercation with Exxon Mobil (XOM, +1.9%). Experts however, do not believe Chavez will carry out his threat.

Motorola and Nortel Planning Joint Venture. Motorola (MOT, +2.8% is reportedly in talks with Nortel Networks (NT, -1.6%) to merge the companies' wireless infrastructure business according to the Wall Street Journal. The move could create a company with sales north of $10 billion/year.


Notable Earnings (Full List Here):
Credit Suisse (NYSE:CS) Before Open
General Motors (NYSE:GM) Before Open

Wynn Resorts (NYSE:WYN) After Close

Economic Events:
2:00 PM: Treasury Budget