Wall Street struggled to shake flu fears Monday afternoon as stocks dipped back into the red over concerns about how a potential global pandemic will impact the already-weak world economy.

Today’s Markets

As of 1:45 p.m. EDT, the Dow Jones Industrial Average lost 44.44 points, or 0.55%, to 8032.16, the S&P 500 sank 7.05 points, or 0.81%, to 859.18 and the Nasdaq Composite fell 11.84 points, or 0.70%, to 1682.48. The consumer-friendly FOX 50 dropped 5.62 points, or 0.88%, to 62.65.

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“As if the global economy, let alone the world itself, needed another thing to worry about, swine flu comes along,” Peter Boockvar, equity strategist at Miller Tabak, wrote in a note.

Aside from the latest news about swine flu, the markets were influenced Monday by new restructuring efforts by General Motors (GM: 2.02, 0.34, 20.24%) and Chrysler LLC, a dive in crude oil prices and several earnings reports from Verizon (VZ: 30.29, -0.63, -2.04%), Whirlpool (WHR: 44.3, 3.59, 8.82%) and Humana (HUM: 29.3336, 1.9436, 7.1%).

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Also, the markets briefly tumbled after an Air Force One lookalike was seen circling Lower Manhattan, evoking memories of the Sept. 11 attacks. But stocks quickly recovered as it became clear the plane was part of a scheduled “photo op.”

The Dow is well off its worst levels of the day and is trading significantly higher than the selloff in pre-market action indicated.

“I think the market is quite remarkable in a sense. No matter what causes the selloff, the market seems to find some support and some legs,” NSYE trader Ted Weisberg of Seaport Securities told FOX Business. “The ability of the market to climb out of these negative biases is a very positive thing.”

Monday’s back-and-forth action comes after the Dow’s six-week win streak was ended last week even though the benchmark index rallied in three of the last four days, including Friday’s 119-point jump. The blue-chip index has given little to none of its 23% surge back even as economic reports remain bleak and skepticism about bank profits persist.

More than half of the Dow’s 30 components were stuck in the red, led by American Express (AXP: 24.1492, -1.0408, -4.13%) and DuPont (DD: 27.44, -1.34, -4.66%). On the other hand, the biggest percentage gainers on the index were GM and Pfizer (PFE: 13.39, 0.2382, 1.81%).

Flu Fears Rattle Markets

Without any economic reports slated for release, traders fretted about the swine flu outbreaks, which represent the greatest chance for a global epidemic since the avian flu in 1997. Stocks came under renewed pressure Monday afternoon as the World Health Organization warned it may raise its pandemic alert level one or two notches.

“Everybody is just focusing on this swine flu. The next 24 to 48 hours will let us know if it’s an overreaction or not,” said Frank Davis, director of sales and trading. “Who would think that the swine flu would initiate a selloff, but that very well could be.”

Fears the outbreaks will hurt global travel or even transform into a global pandemic sent global markets reeling and put earlier pressure on U.S. stocks, which have since recovered. The worries are rooted in recent history as Hong Kong sank into a six-month recession in 2003 after respiratory disease SARS caused tourism and business travel in the region to plummet.

The U.S. and other countries declared states of emergency over the weekend as Mexico said there are more than 1,600 suspected cases there, including more than 100 deaths. While there were no known deaths in the U.S., the E.U. advised its citizens to avoid all non-essential travel to the United States and Mexico.

Shares of transportation companies slumped on the swine flu fears, including airlines like United Airlines (UAUA: 5.56, -0.86, -13.4%) and JetBlue (JBLU: 4.93, -0.6, -10.85%). Other tourism-related stocks were also in the red, including Carnival (CCL: 24.43, -3.97, -13.98%) and Starwood Hotels & Resorts (HOT: 18.51, -2.26, -10.88%).

On the other hand, several pharmaceutical companies like Roche (RHHBY: undefined, undefined, undefined%) and GlaxoSmithKline (GSK: 31.6978, 2.3778, 8.11%) rose sharply on speculation they could do well on flu-related treatments.

Energy stocks such as Schlumberger (SLB: 48.12, -1.44, -2.91%) and ConocoPhillips (COP: 41.02, -0.01, -0.02%) sank as crude oil tumbled as much as 7% on worries about how the outbreak will impact the global economy. However, crude also recovered, recently trading down $1.94 per barrel, or 3.76%, to $46.90.

Auto Restructurings

Meanwhile, the markets were monitoring the latest drama surrounding the domestic auto industry.

General Motors (GM: 2.02, 0.34, 20.24%) launched a plan to exchange $27.2 billion of bonds for equity and said it will slash 21,000 U.S. hourly workers. The company said it will file for bankruptcy protection if the debt-for-equity exchange doesn’t work. GM also said it will shut almost half of its 6,200 U.S. dealers.

At the same time, Chrysler LLC reached major deals with both the United Auto Workers and CAW over the weekend, days before its April 30 deadline to reach an alliance with Italian auto maker Fiat. Chrysler must now reach a deal with a consortium of lenders to lower its debt load.

Corporate Movers

Verizon (VZ: 30.29, -0.63, -2.04%) exceeded expectations with an adjusted-profit of 63 cents per share thanks to gains from its Alltel purchase. The telecom giant’s revenue rose 11.6% to $26.59 billion as the company’s Verizon Wireless unit added 1.3 million wireless users.

Bank of America (BAC: 9.06, 0.01, 0.11%) made false statements concerning bonuses paid to Merrill Lynch employees in the days before completing its acquisition of the brokerage house, former Merrill CEO John Thain told The Wall Street Journal. Separately, BofA decided to scrap the Countrywide brand in its mortgage operations less than a year after the bank bought Countrywide Financial, then the largest U.S. mortgage lender.

Wells Fargo (WFC: 20.5508, -0.7792, -3.65%) was under heavy pressure after influential analyst Dick Bove downgraded the banking giant to “neutral” from “buy,” citing concerns about its bloated balance sheet. Bove also cut his 2009 and 2010 earnings forecasts.

Qualcomm (QCOM: 42.84, 1.48, 3.58%) swung to a first-quarter loss but the cellphone chip supplier posted better-than-expected revenue of $2.46 billion and boosted its annual revenue target.. The company also agreed to pay $891 million to Broadcom (BRCM: 24.19, -0.03, -0.12%) to settle a patent infringement law suit.

American International Group (AIG: 1.42, -0.04, -2.74%) has received three bids for its aircraft leasing business that value the unit at less than $5 billion, the Financial Times reported. The leading bidders for the unit, International Lease Finance Corp., is a group including Thomas H. Lee Partners and Carlyle Group, the paper reported.

Whirlpool (WHR: 44.3, 3.59, 8.82%) said its first-quarter net income sank 27% but the results may have exceeded the Street’s view. The appliance maker also backed its 2009 profit forecast even as it said it expects shipments to tumble by 12% from a year ago.

Corning (GLW: 15.945, 0.615, 4.01%) suffered a 99% drop in first-quartet net income but the glass maker’s adjusted-profit of 10 cents per share topped estimates by a nickel. While Corning said its revenue tumbled 9% last quarter, it doubled its 2009 unit growth forecast.

Humana (HUM: 29.3336, 1.9436, 7.1%) beat the Street with a first-quarter profit of $1.22 per share thanks to strength in its Medicare plans. The health provider also boosted its 2009 forecast.

Global Markets

European markets conquered the flu worries as London’s FTSE 100 rose 0.27% to 4167.01 and Germany’s DAX gained 0.42% to 4694.07.

Asian markets were unable to shake the flu news. Japan’s Nikkei 225 closed up 0.21% to 8726.34 but Hong Kong’s Hang Seng dropped 2.74% to 14480.42 and China’s Shanghai Composite fell 1.77% to 2405.35.

Wall Street struggled to make headway Thursday afternoon as traders worried about the latest economic and labor reports underscoring the depth of the U.S. recession.

Today’s Markets

As of 12:26 p.m. EDT, the Dow Jones Industrial Average lost 49.22 points, or 0.62%, to 7837.11, the S&P 500 sank 3.77 points, or 0.47%, to 839.62 and the Nasdaq Composite lost 11.66 points, or 0.68%, to 1634.85. The consumer-friendly FOX 50 dropped 1.42 points, or 0.23%, to 621.57.

The markets received a series of conflicting messages on Thursday. While Apple’s (AAPL: 125.8151, 4.3051, 3.54%) better-than-expected quarterly report gave Wall Street much-needed confidence Thursday, economic bellwether UPS (UPS: 53.0602, -1.6498, -3.02%) widely missed analysts’ estimates, an industry group said home resales tumbled last month and the government said continuing jobless claims soared to another record high amid the 17-month U.S. recession.

The bulls on Wall Street are struggling to send the markets to a rebound from Wednesday’s late slide, which torpedoed an earlier rally. The Dow’s six-week win streak is in doubt as the index is off by more than 200 points this week amid mixed earnings reports and fatigue from the best month and a half since 1938.

“I think people are most frightened by that UPS number,” NYSE trader Bernie McSherry of Cuttone & Co. told FOX Business.

Most of the Dow’s 30 components were in the red in recent action, led by General Motors (GM: 1.6, -0.0801, -4.77%), Home Depot (HD: 25.67, -0.44, -1.69%) and DuPont (DD: 27.1322, -0.6178, -2.23%). On the upside, American Express (AXP: 20.0928, 0.6928, 3.57%) and Bank of America (BAC: 8.46, 0.02, 0.24%) posted the benchmark index’s biggest percentage gains.

Hopes for clear signs of stabilization in the housing market were dashed by a new report from the National Association of Realtors, which showed existing home sales slid 3% in March to a weaker-than-expected rate of 4.57 million units. The group also said median prices sank 12% from a year ago to $200,100.

The markets were also hurt by the Labor Department’s weekly employment report, which showed initial jobless claims increased by 27,000 last week to 640,000, mostly in-line with estimates. The government also said the total number of people drawing unemployment benefits rose by 93,000 to 6.14 million — another all-time high.

Despite the very weak labor market, it’s apparent consumers are still willing to spend money on Apple’s (AAPL: 125.8151, 4.3051, 3.54%) premium goods. The tech giant said the most recent quarter was its best non-holiday quarter ever as Apple solidly beat the market’s expectations even without high-profile CEO Steve Jobs. However, the Nasdaq Composite slumped despite Apple and online auction site eBay’s (EBAY: 16.3, 1.5, 10.14%) solid quarterly results.

The positive news out of the tech sector was somewhat muted by concerns about how companies are dealing with the weakened economy. Those worries were underscored by transportation giant and economic barometer UPS, which reported a deeper-than-expected quarterly profit decline of 56%. UPS also said it does not expect the U.S. economy to recover until 2010 and a projected disappointing second-quarter profit.

Financial stocks were slightly higher Thursday following better-than-expected results from PNC Financial (PNC: 38.74, 0.86, 2.27%), Credit Suisse (CS: 37.77, 4.81, 14.59%) and SunTrust Banks (STI: 14.19, -1.23, -7.98%). After the closing bell financial giant American Express (AXP: 20.0928, 0.6928, 3.57%) is set to issue its quarterly results.

However, the markets remain nervous about the government-administered bank “stress tests” as the Treasury plans to release some of the results to banks on Friday. The tests are expected to show how much more capital banks need, if any, to protect against a further deterioration in the economy.

“I’m a little worried about the stress test data leaking out over the next few days,” said McSherry. “If we hear some bad data I think we can really see this market whither.”

In the commodity markets, crude oil was on pace to extend its two-day win streak despite Wednesday’s bearish inventory report. Crude was recently up 9 cents per barrel, or 0.18%, to $48.94. Gold rose $15.30 per ounce, or 1.71%, to $907.80.

Corporate Movers

Bank of America (BAC: 8.46, 0.02, 0.24%) CEO Ken Lewis told prosecutors he believed former Treasury Secretary Henry Paulson and Fed Chief Ben Bernanke ordered him to be silent about deepening trouble at Merrill Lynch, The Wall Street Journal reported. “It wasn’t up to me” to disclose Merrill’s huge quarterly losses before shareholders approved the deal, Lewis reportedly told prosecutors. Regulators feared the deal’s collapse would harm the financial system.

General Motors (GM: 1.6, -0.0801, -4.77%) plans to idle most of its plants for about two months over the summer to cut costs and offset bloated inventories, the Journal reported. Also, the auto maker is nearing a deal to sell a majority stake in its Opel business to Italian car maker Fiat, German magazine Der Spiegel reported.

Chrysler LLC would have its debt reduced by 78% and give lenders a 5% equity stake based on a new counterproposal from the Treasury to lenders, the Journal reported. However, the two sides remain far apart as lenders, which include Citigroup (C: 3.17, 0.02, 0.63%) and JPMorgan Chase (JPM: 32.29, 0.45, 1.41%) had reportedly been looking for a 40% equity stake and to reduce Chrysler’s debt by just 35%.

Credit Suisse (CS: 37.77, 4.81, 14.59%) issued a first-quarter profit of $1.7 billion, doubling expectations. The second-largest Swiss bank was optimistic in its guidance.

PNC Financial (PNC: 38.74, 0.86, 2.27%) issued a quarterly profit of $1.03 per share, more than double what the Street was looking for. However, much of those gains came from its buyout of National City and the bank said nonperforming assets soared by 60% and it set aside $880 million for credit losses, up from $151 million a year ago.

SunTrust Banks (STI: 14.19, -1.23, -7.98%) disclosed a quarterly loss of $2.49 per share but its non-GAAP loss of 46 cents per share topped the Street’s view. The southeast regional bank said its loan-loss provisions soared by 78% to $994.1 million and net charge-offs more than doubled to $610.1 million.

Coca-Cola (KO: 42.88, -0.05, -0.12%) is in negotiations to take a possible minority interest in Chinese juice maker Huiyuan Juice Group, according to the Journal. Coca-Cola tried to purchase the company for $2.4 billion last month, but the deal was shot down by Chinese regulators, who cited antimonopoly rules.

NYSE Euronext (NYX: 22.82, 2.38, 11.64%), the parent of the New York Stock Exchange, is in advanced talks with Deutsche Boerse over a merger that would create the largest stock market operator in the world, a German magazine reported. A merger could reportedly come as soon as next month.

Fifth Third Bancorp (FITB: 3.8, 0.11, 2.98%) disclosed a quarterly loss of 22 cents per share, surprising analysts who had expected a deeper loss of 28 cents.

Black & Decker (BDK: 35.51, 2.5, 7.57%) saw its shares slide even after the manufacturer posted a 93% drop in profit and cut its outlook. Still, the company’s adjusted-profit of 22 cents per share exceeded estimates and it said its full-year profit could still top expectations.

AutoNation (AN: 16.82, 1.43, 9.29%) said its quarterly profit slid 32% but the results beat the Street. The company also said it sees auto sales improving during the second half of the year.

Radioshack (RSH: 12.14, 1.35, 12.51%) reported a profit of 34 cents a share, 12 cents better than expectations. The electronic retailer’s stock soared as it said same-store sales rose 5% during the quarter thanks in part to sales of its digital converter boxes.

News Corp. (NWS: 8.55, -0.19, -2.17%) plans to replace MySpace founders Chris DeWolfe and Tom Anderson with former Facebook COO Owen Van Natta as the company’s CEO, the Journal reported. The social-networking site’s founders stepped aside months before their contracts were set to expire, the newspaper reported. The Journal and FOX Business are both owned by News Corp.

Global Markets

In London, the FTSE 100 rose 0.8% to 4063.01 while Paris’ CAC 40 rallied 0.58% to 3042.89 and Germany’s DAX fell 0.08% to 4590.80.

In Asia, Japan’s Nikkei 225 gained 1.37% to 8847.01 while Hong Kong’s Hang Seng jumped 2.26% to 15214.46. China’s Shanghai Composite gained 0.1% to 2463.95.

The gloomy economic climate has forced many businesses to close up shop, but one fund manager says the business of protecting the world’s food supply isn’t going away anytime soon.

And that’s just one reason why agrichemicals company Syngenta (SYT: 40.92, 0.39, 0.96%) is a worthy investment right now, said David Carr, portfolio manager for the Oak Value Fund (OAKVX: undefined, undefined, undefined%) and chairman of Oak Value Capital Management in Chapel Hill, N.C.

Carr, who has had the stock in his holdings since the fourth quarter of 2008, believes Swiss-based Syngenta’s expertise in the crop-protection and seed business positions it for long-term growth. While many industries have seen demand buckle under the weight of the slumping economy, Carr said expectations for population growth have made strong, healthy crop yields a global necessity.

“What we like is that the underlying demand is a given. People are going to eat; it’s recession-proof,” he said.
What Carr also likes is Syngenta’s portfolio of patented products, which he believes provides the “best and broadest” protection against pests and diseases that threaten the world’s food supply. The company is keen on research and development, focused on developing technology that will increase output per acre for farmers across the globe.

“Farmers that don’t use the better technology end up being a lot less efficient,” he said. “They see a good price-value relationship — it still makes sense for them to spend the money on these products.”

Though Syngenta’s business, by nature, is closely tied to the commodities market, Carr stressed that the company is not a commodities business, and can therefore withstand fluctuations in the commodities market.

Still, the company hasn’t been immune to the troubles of the larger market. Syngenta’s stock, which is now trading in the $40 range, has lost nearly 38% of its value since last summer, when shares fetched as much as $66.78 a piece. For Carr, the fear-driven decline provided a one-of-a-kind investment opportunity.

“When [the stock] fell, people just didn’t pay attention… We felt it was a chance to pick up something really cheap with good, strong growth.”

And growth is certainly on the company’s agenda. The company is set on achieving a 15% EBITDA margin target by 2011 in its seed business, which at the moment, isn’t that profitable and trails big-name competitors Monsanto (MON: 79.415, 0.945, 1.2%) and DuPont (DD: 27.82, 1.01, 3.77%), Carr said.

With more than 24,000 employees in 90 countries, Syngenta has a sprawling international presence, but is smart about keeping its growth in check. Carr said the company has great working relationships with Eastern Europe and South America, but has purposely slowed growth in those areas to limit credit exposure.

Converting the government’s preferred Troubled Asset Relief Program shares into common stock remains an option if stress tests determine that certain banks need more capital, a Treasury Department spokesperson said Monday.

Treasury took that very measure with Citigroup (C: 2.86, -0.09, -3.05%) earlier this year when Citi needed to shore up its capital reserves.

Common shares count directly as the best form of capital, tangible common equity, while the Treasury’s existing preferred shares count only in some levels of regulatory capital.

Analysts say this is a likely course of action for the government as, among other things, it would require no direct outlays of new TARP capital in a bank.

Consideration of this tactic comes as the government works to conduct “stress tests” on 19 top U.S. financial institutions such as Bank of America (BAC: 7.75, -0.32, -3.97%), Goldman Sachs (GS: 115.4, 0.017, 0.01%), JPMorgan Chase (JPM: 30.2682, 0.5182, 1.74%) and Wells Fargo (WFC: 17.53, 0.44, 2.57%) to determine how healthy their balance sheets are.

Congress set aside $700 billion for TARP last fall, and less than $150 billion of that remains unallocated — but this move would prevent the government from having to dip into its dwindling TARP resources.

Also, “it may be that some banks are in a situation where they say we could do just fine with the amount that we have,” said Wayne Abernathy, executive vice president at the American Bankers Association. “But given what kinds of stresses are revealed in the super stress test, having that option to convert to common as opposed to preferred would be helpful because of the way you deal with that.“

However, conversion of preferred shares into common would boost the government’s stake in a bank, possibly leading to greater government control over the institution.

Still Abernathy noted one more item on the plus side: “It creates a way for the government investment to get out,” he said. “it’s easier to withdraw when this is all done with a common share investment than it is with a preferred share…  because you can sell the common shares on the market.”