Caution from Bernanke sends stock indexes lower

NEW YORK - Stocks spent most of Monday in a funk brought on by cautious comments about the economy from Federal Reserve Chairman Ben Bernanke.

Stocks began the day on a sour note after Federal Reserve Chairman Ben Bernanke said the economic recovery is still struggling to become "self-sustaining" without government help.

In an interview with CBS' "60 Minutes" that aired Sunday, Bernanke argued that Congress shouldn't cut spending or boost taxes given how fragile the economy remains. He also said it could take four or five more years for unemployment, now at 9.8 percent, to fall to a historically normal 5 percent or 6 percent.

The Dow Jones industrial average fell 19.90, or 0.2 percent, to close at 11,362.19. The index had been down as many as 32 points earlier in the day.

The broader Standard amp& Poor's 500 index lost 1.59, or 0.1 percent, to 1,223.12. The Nasdaq composite index rose 3.46, or 0.1 percent, at 2,594.92.

Gold for February delivery added $9.90 to settle at $1,416.10 an ounce.

Investors makes play for Borders-Barnes & Noble combo

NEW YORK - Activist investor William Ackman and his investment firm announced in a regulatory filing Monday that they had offered to finance a $963 million bid by Borders for Barnes & Noble Inc.

Under the deal, Pershing Square Capital Management would sponsor a bid by Borders of $16 per share for more than 60 million outstanding Barnes & Noble shares. The news sent Barnes & Noble's shares up 10.6 percent, or $1.41, on Monday to close at $14.69.

Borders spokeswoman Mary Davis said the company welcomes Ackman's "participation."

"We have previously expressed to Barnes & Noble our interest in such a business combination, and we look forward to continuing those discussions," she said.

Barnes & Noble had no comment.

Gov't plans to sell 2.4B shares of Citigroup stock

WASHINGTON - The government said it will sell its remaining shares of Citigroup common stock in the latest effort to recoup costs from the $700 billion financial bailout.

The Treasury Department said Monday that it will sell approximately 2.4 billion shares of Citigroup Inc. common stock. The sale would begin immediately and would end when the government determined that it had received an acceptable price for the shares.

Citigroup received $45 billion in taxpayer support in one of the largest bank rescues by the government.

Of the $45 billion in taxpayer support provided to Citigroup, $25 billion was converted to a government ownership stake that the Treasury has been selling off since last spring. The bank repaid the other $20 billion in December 2009.

Treasury had sold 5.3 billion shares of common stock before Monday's announcement. The planned sale of the additional 2.4 billion shares would complete the sale of Treasury's holdings of Citigroup common stock.

- AP

Recommended for you

comments powered by Disqus