Stocks Advance After Wireless Firms’ Agreement

Investors sent stocks sharply higher Tuesday as Cingular Wireless’ $41-billion winning bid for AT&T; Wireless Services set an upbeat tone on Wall Street, suggesting that corporate America is loosening its pocketbook strings.

There also was encouraging economic news from the Federal Reserve, which reported a rebound in production at the nation’s factories, mines and utilities last month. The 0.8% rise in industrial production matched forecasts and was welcome after a flat reading in December.

As trading resumed after the long holiday weekend, the Dow Jones industrial average surged 87.03 points, or 0.8%, to close at 10,714.88.

Broader market gauges also moved higher. The Nasdaq composite index sprinted 26.79 points, or 1.3%, to 2,080.35. The Standard & Poor’s 500 index closed up 11.18 points, or 1%, at 1,156.99.

An S&P; index of mid-sized stocks jumped 1% to a record high of 608.40.

Rising issues outnumbered losers by almost 3 to 1 on the New York Stock Exchange and by 2 to 1 on Nasdaq.

The fairly aggressive bid for AT&T; Wireless Services, which many thought would sell for about $30 billion, sparked a good deal of optimism, traders said. Some hoped the deal would inspire more spending in the telecommunications sector.

“Seeing corporations pay a premium like this for companies could lead some investors to think maybe the market’s still a bit undervalued, so we’re seeing shares drift higher,” said Todd Clark, head of listed equity trading at Wells Fargo Securities.

AT&T; Wireless soared $1.96, or 16.6%, to $13.78 after accepting Cingular Wireless’ offer, in a deal that would create the nation’s largest mobile phone firm.

In other merger news, New York-based banking giant GreenPoint Financial shed $1.58 to $45.25 on news that it would be acquired by North Fork Bancorp in a $6.3-billion all-stock deal, creating the nation’s 16th-largest bank. North Fork shares fell 38 cents to $43.37. GreenPoint shares had run up sharply in recent weeks.

Further underscoring the ongoing consolidation in the banking sector, Provident Financial Group shot up $3.87 to $38.70 after National City agreed to acquire it for $2.1 billion in stock. The combined entity would be Ohio’s largest bank. National City fell 83 cents to $34.56.

“The big thing about all this merger and acquisition activity is it’s a confidence-builder,” said Peter Dunay, chief market strategist at Wall Street Access, a New York-based brokerage firm.

Among companies reporting earnings Tuesday, heavy equipment maker Deere gained $2.99 to $67 after beating analyst expectations on strong sales of agricultural, construction and consumer products, and a continued effort to hold down costs. The weaker dollar also helped boost foreign sales.

In currency trading, the dollar fell further against the euro, British pound and other major currencies on speculation interest rates in the U.S. will remain lower than those in Europe and deter investors seeking higher-yielding debt securities.

European Central Bank President Jean-Claude Trichet said the bank’s benchmark rate of 2%, twice the Federal Reserve’s rate, is “appropriate.”

“The dollar is in trouble,” said Mark Austin, currency strategist at HSBC Holdings in London. “I don’t think it will be too long before we see new highs in the euro and the risk is that a move higher could attract new buyers.”

Against the euro, the dollar fell to $1.284 in New York from $1.28 on Friday.

The dollar fell to $1.90 versus the British pound for the first time since September 1992 and dropped to a seven-year low versus the Australian dollar.

In other markets, Treasury bond yields were flat. Gold gained as the dollar slid. Near-term gold futures rose $5.70 to $416 an ounce in New York.

Market Roundup, C6-7