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Stocks mixed despite bin Laden death, earnings

NEW YORK — Stocks lost some of their early gains and turned mixed Monday despite the death of Osama bin Laden, several strong earnings reports and a major drug industry acquisition.

The Dow Jones industrial average remained near its three-year high. It rose 8 points to 12,818 in afternoon trading. The average of 30 stocks had been up as many as 65 points earlier in the day.

President Barack Obama said late Sunday that bin Laden, the al-Qaida chief who masterminded the Sept. 11, 2001 attacks, had been killed by U.S. forces in Pakistan. The news lifted investors’ mood when the market opened.

“It’s a feel-good item,” said Howard Silverblatt, senior index analyst at Standard & Poor’s. “It gives closure to a lot people.”

But Silverblatt, like many analysts, cautioned that the news would likely result in brief gains for the market, as traders shifted their focus to earnings results and economic news. So far, strong earnings over the last two weeks helped the Standard & Poor’s 500 reach its highest levels since the financial crisis, closing at 1363.61 on Friday.

In afternoon trading, the S&P 500 index rose less than a point to 1,364. It had been up 7 points earlier. The Nasdaq composite index fell 2 points to 2,872.

Dish Network Corp., Chrysler Group LLC and Humana Inc. all reported strong earnings. Dish Network’s first-quarter net income more than doubled, in part, because of a patent settlement with TiVo Inc. Its stock rose 16 percent.

Humana’s profit rose 22 percent. The company benefited from more people enrolling in its Medicare plans. Its stock was flat.

The privately-held Chrysler reported its first profit since leaving bankruptcy two years ago thanks to higher sales.

Whole Foods Market Inc. fell 5 percent, making it the worst-performing stock in the S&P 500. A Jefferies analyst downgraded the company and said sales could stagnate as shoppers feel the pinch of higher gas prices.

In corporate news, Israeli drug maker Teva Pharmaceutical Industries Ltd. said it would buy Cephalon Inc. for $81.50 per share, or $6.8 billion. Cephalon’s key drugs include the sleep disorder treatment Provigil and the cancer drug Treanda. Cephalon’s shares rose 4 percent.

Bond prices rose, sending yields lower. The yield on the 10-year Treasury note fell to 3.28 percent from 3.29 percent late Friday. The dollar fell 0.2 percent against an index of six other heavily traded currencies.

The Institute of Supply Management reported that manufacturing activity increased for the 21st month in April, though at a slightly slower pace than the month before. This was expected by economists. The Commerce Department also reported that builders started work on more projects in March after three straight monthly declines in construction spending.