Stocks drift lower; Hillshire bidding war heats up

Stocks drift lower; Hillshire bidding war heats up


AP Markets Writer NEW YORK (AP) - U.S. stocks are heading lower in late-morning trading Tuesday, a day after major indexes reached new highs.

KEEPING SCORE: The Dow Jones industrial average dropped 45 points, or 0.3 percent, to 16,699 as of 11 a.m. Eastern. The Standard & Poor's 500 lost four points, or 0.2 percent, to 1,921 and the Nasdaq composite fell 10 points, or 0.2 percent, to 4,227. On Monday, both the Dow and S&P 500 hit record highs for the second straight day.

THE HUNT FOR HILLSHIRE: Deli meat and hotdog maker Hillshire Brands rose $4.61, or 9 percent, to $58.20. The company said it will hold separate talks with Tyson Foods and Pilgrim's Pride, who are currently in a bidding war to buy Hillshire. Pilgrim's Pride late Monday raised its bid to $55 a share, $5 more than what Tyson Food's offered last week. Hillshire was trading several dollars above Pilgrim's bid, a sign that investors believe both Pilgrim's Pride and Tyson are willing to offer much more for Hillshire.

NOT A TREAT: Krispy Kreme slumped after the doughnut chain cut its forecast for earnings this year, citing higher costs and fewer sales than previously estimated. The company's stock fell $2.38, or 13 percent, to $16.61.

FACTORY ORDERS: Orders to U.S. factories rose for a third consecutive month in April, adding to evidence that manufacturing is regaining momentum after the harsh winter. Factory orders rose 0.7 percent in April, better than the 0.5 percent rise that economists had expected.

BONDS: In the market for U.S. government bonds, the yield on the 10-year Treasury rose to 2.57 percent from 2.53 percent late Monday.

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