Reuters
Published Sep 28, 2009 02:43PM ET
* Xerox will buy ACS; Abbott to buy Solvay's drugs unit
* DJIA headed for best quarter since 1998
* Dow up 1.3 pct; S&P 500 up 1.7 pct; Nasdaq up 2 pct
* For up-to-the-minute market news, click [STXNEWS/US] (Updates to mid-afternoon, changes byline)
By Ellis Mnyandu
NEW YORK, Sept 28 (Reuters) - U.S. stocks rose on Monday, halting a three-day losing streak, as a spurt of corporate takeovers in the technology and healthcare sectors fueled optimism about share values.
Mergers and acquisitions are typically viewed as bullish as it suggests companies are more optimistic about the business outlook.
A number of deals were announced. Xerox Corp
"It's always a positive sign when you see companies putting money to work, whether they buy other companies, invest in new plants, (or) buyback their own stock," said Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC in Greenwich, Connecticut.
"With depressed stock prices, like we've had over the past year-and-a-half, a lot of companies will find it cheaper to buy a company than to grow that same type of company organically. It's a more effective way to put money to work sometimes."
Abbott climbed nearly 3 percent to $48.69 while Affiliated Computer advanced 11.4 percent to $52.64. Xerox, which valued the cash-and-stock deal for Affiliated at an initial $6.4 billion, sank 18.4 percent to $7.33. For details on Xerox, see [ID:nN2863430]. For details on Abbott, see [ID:nLS426471]]
With Monday's gains, the Dow Jones industrial average is up about 16 percent in the quarter so far, which would make it the index's best such period since the fourth quarter of 1998.
The Dow Jones industrial average <.dji> rose 129.92 points, or 1.34 percent, to 9,795.11. The Standard & Poor's 500 Index <.spx> jumped 17.51 points, or 1.68 percent, to 1,061.89. The Nasdaq Composite Index <.ixic> shot up 41.50 points, or 1.98 percent, to 2,132.42.
In the last three sessions, the S&P 500 had declined more than 2 percent after rallying nearly 60 percent from the 12-year lows of early March.
Other deals on Monday included U.S. diversified health care
company Johnson & Johnson's
Crucell fell 6 percent to $22.29 on Nasdaq, but J&J, a Dow component, was up 1.2 percent at $61.36 on the New York Stock Exchange.
Apple Inc
Apple was the Nasdaq's top boost, followed by chipmaker
Qualcomm Inc
Dow Chemical Co
Other industrial standouts were planemaker Boeing Co
The Jewish holiday of Yom Kippur observed on Monday kept volumes lighter. The end of the third quarter on Wednesday may spur volatility as fund managers engage in what is known as "window dressing" -- when they sell laggards in favor of outperformers to spruce up portfolios at quarter's end. (Editing by Padraic Cassidy)
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.