U.S. Markets closed

Stocks drift lower on Wall Street; Shaw soars

Matthew Craft, AP Business Writer

FILE - In a Thursday, July 26, 2012 photo, traders gather at a post on the floor of the New York Stock Exchange during the IPO of Northern Tier Energy. U.S. stocks crept higher in early trading Monday, July 30, 2012 on Wall Street following big gains last week. (AP Photo/Richard Drew, File)

NEW YORK (AP) -- U.S. stocks drifted lower Monday, following big gains last week on expectations that European leaders would take action to calm the region's debt crisis.

The Dow Jones industrial average sank seven points to 13,069 shortly as of 1:30 p.m. Eastern. JPMorgan Chase led the Dow lower, falling 2 percent to $36.13.

U.S. Treasury Secretary Timothy Geithner meets separately with Germany's finance minister and the head of the European Central Bank, Mario Draghi, on Monday. Draghi's pledge to do whatever was needed to protect the euro set off a market rally last week. The Dow rose back above 13,000 for the first time since May and is now up 1.5 percent for the month.

Hopes are high that Draghi will back up his words with action when the central bank meets Thursday, said David Brown, the CEO and chief market strategist at the research firm Sabrient. "I think that's the big story this week," he said. "The market has really responded to his bold statement. I hope the ECB takes action. If they don't do anything, it's not going to be pretty."

Investors are also looking toward the Federal Reserve's meeting this week. Many in the financial markets believe the Fed will take new steps to stimulate the economy in coming months. The Fed will release its statement on interest rate policy Wednesday afternoon.

Besides the Fed statement Wednesday and the ECB meeting Thursday, another potentially market-moving event is coming up on Friday, when the U.S. Labor Department releases its monthly employment survey. Economists expect that the unemployment rate will remain unchanged at 8.2 percent.

In other Monday trading, the broader Standard & Poor's 500 index fell one point to 1,384, while the Nasdaq dropped 11 points to 2,947.

The indexes had been creeping higher early in the day, then reversed course soon after a regional manufacturing report came in much weaker than expected. A survey of manufacturing by the Dallas branch of the Federal Reserve showed a steep drop in July. Economists had forecast a modest gain.

Two corporate deals announced early Monday pushed some stocks higher. Chicago Bridge & Iron Co. agreed to buy Shaw Group for $3 billion in cash and stock. Shaw jumped $14.73, or 55 percent, to $41.40.

Medical and industrial equipment maker Roper Industries said it plans to buy hospital software company Sunquest Information Systems for $1.42 billion. Roper also raised its earnings estimate for the year, a result of the pending merger and a stronger dollar. Roper gained 4 percent to $102.19. Sunquest is privately owned.

Among other stocks making big moves:

— Supermarket operator Supervalu rose 12 percent, or 22 cents, to $2.21 after the company announced that it would oust its CEO. Earlier this month, the Minneapolis company reported weaker sales and profits and suspended its dividend. Supervalu also said it may put itself up for sale.

— Loews Corp. sank 5 percent after reporting that its net income plunged 78 percent in the second quarter. The holding company, controlled by New York's Tisch family, took a hit as falling energy prices lowered the value of its oil and gas properties. The company runs Diamond Offshore Drilling Inc., HighMount Exploration & Production and Loews Hotels. Its stock sank $2.10 to $39.60.

— Suntech Power Holdings plunged 13 percent. The Chinese solar company said it may be the victim of a massive fraud. Suntech dropped 20 cents to $1.37. The solar company's stock has lost 82 percent of its market value over the past year.