* Dow Chemical, Kuwait deal collapses
* Large-cap tech companies drag down Nasdaq
* Oil rises above $40 per barrel on Middle East conflict
* Dow, S&P off 0.4 pct, Nasdaq off 1.3 pct
* For up to the minute market news, please click on
[].
(Adds context to Dow index)
By Chuck Mikolajczak
NEW YORK, Dec 29 (Reuters) - Wall Street slid on Monday
after Kuwait pulled out of a joint venture with Dow Chemical
due to the deepening global recession, threatening Dow's
planned takeover of Rohm & Haas.
Rising energy shares tempered losses after oil prices
<CLc1> rose 6 percent following Israeli air strikes in the Gaza
Strip. The third day of fighting came as Israel prepared to
launch a possible invasion. []
Dow Chemical shares <DOW.N> tumbled to their lowest level
since 1991 after Kuwait decided to end the planned $17.4
billion joint venture, citing slumping petrochemical sales and
the global financial crisis. For details, see []
The news raised concerns that Dow, the largest U.S.
chemical company, would not be able to complete its deal to buy
rival Rohm & Haas <ROH.N>, which Dow had agreed to acquire for
about $15.3 billion in July. Rohm & Haas shares fell as much as
25 percent. []
The declines were exacerbated by light volume, analysts
said. Trading is expected to be light throughout the week,
abbreviated by the New Year's holiday on Thursday.
"What stocks are grappling with is discounting how long,
how deep of a recession this is going to be and when the sun is
going to go up again," said Kevin Kruszenski, head of listed
trading at KeyBanc Capital Markets in Cleveland.
"That clearly drove the decision," he added, of Kuwait's
decision to cancel the Dow Chemicals deal.
The Dow Jones industrial average <> slipped 31.62
points, or 0.37 percent, to 8,483.93. The Standard & Poor's 500
Index <.SPX> fell 3.38 points, or 0.39 percent, to 869.42. The
Nasdaq Composite Index <> dropped 19.92 points, or 1.30
percent, to 1,510.32.
The Dow is down 3.9 percent month-to-date after a 5.3
percent fall in November and 36 percent for the year.
The Nasdaq was dragged down by large-cap tech companies
including BlackBerry maker Research In Motion <RIM.TO>
<RIMM.O>, which fell 5 percent to $38.81, and Cisco Systems
<CSCO.O>, down 1.6 percent to $16.01.
Dow Chemicals and Rohm & Haas were among the largest
percentage decliners on the New York Stock Exchange. Dow was
down 19 percent to $15.32, while Rohm & Haas fell 16.1 percent
to $53.34.
The collapsed joint venture added to concerns about the
chemicals industry, which has been struggling because of
recessions in most developed countries and a sharp slowdown in
emerging economies.
Economic worries overshadowed gains in the energy sector as
oil climbed on concerns that crude supplies could be disrupted
by tensions between Israel and the Hamas-ruled Gaza Strip.
Chevron <CVX.N> and Exxon Mobil <XOM.N> were among the best
performers on the Dow, while the S&P 500 index <.GSPE> of
energy stocks rose 1.9 percent. Chevron rose 1.7 percent to
$71.55 and Exxon Mobil rose 1.1 percent to $78.02.
Analysts, meanwhile, said the rise in energy prices did not
bode well for struggling consumers.
As 2008 draws to a close, investors are hoping the incoming
White House administration will offer another stimulus package
in an effort to help steer the country out of a year-long
recession. The broad S&P 500 is down about 40 percent for the
year, second only to 1931's record drop of 47.1 percent.
President-elect Barack Obama has said signing a major
economic stimulus package will be his priority when he takes
office on Jan. 20.
Over the weekend, one of Obama's top economic advisers
said financial policy should address both immediate job
creation and longer-term investment needs.
Lawrence Summers, Obama's pick to head the White House
National Economic Council, said spending government money
solely to stimulate consumer spending would be a short-sighted
mistake. [].
Volume was slim on the New York Stock Exchange, where about
875.4 million shares changed hands, far below last year's
estimated daily average of 1.90 billion. On the Nasdaq, about
1.17 billion shares traded, well below last year's daily
average of 2.17 billion.
Decliners outnumbered advancers on the NYSE by a ratio of
about 3 to 2, while on the Nasdaq, about five stocks fell for
every two that rose.
(Editing by Leslie Adler)
