News From Iraq, Wave of Mergers Push Up Stocks
Successful elections in Iraq and a bevy of buyouts pushed stocks higher Monday in moderately heavy trading, with beaten-down tech stocks enjoying the largest gains.
The success of the Iraqi elections -- despite attacks on 38 of the nation’s polling centers -- and OPEC’s decision to maintain current oil production levels removed a pair of obstacles that had prevented many investors from getting into the market.
The news out of the Middle East failed to halt rising oil prices, however, with a barrel of light crude settling at $48.20, up $1.02, on the New York Mercantile Exchange.
The flurry of new deals, meanwhile, cheered Wall Street. Among the acquisitions announced Monday, MetLife said it would purchase Citigroup’s Travelers Life & Annuity division for $11.5 billion.
“Not a bad Monday to wake up to,” said trader Jay Suskind of Ryan Beck & Co.
“We’ve had a lot of positive catalysts here, and I think people are seeing that January has been very oversold. So we’re moving forward, and the market is now focused back on growth and earnings.”
The Dow Jones industrial average closed up 62.74 points, or 0.6%, to 10,489.94. The Standard & Poor’s 500 index was up 9.91 points, or 0.8%, at 1,181.27, and Nasdaq gained 26.58 points, or 1.3%, to 2,062.41.
Advancing issues outnumbered decliners by more than 3 to 1 on the New York Stock Exchange.
Monday’s move higher was actually less than many analysts had expected, given the success in Iraq and the wave of corporate takeovers. But several issues remain for Wall Street in the week ahead, including the Federal Reserve’s decision on its benchmark interest rate, due Wednesday, and Friday’s job creation report from the Labor Department.
By the end of the week, investors will probably have a clear picture of the economy and can invest with more confidence, analysts said.
“It’s an extremely important, even critical, week for the markets,” said Hugh Johnson, chief investment officer at First Albany Corp. “This week will set the tone for February and March.”
Although Wall Street ended January on a high note, the overall month was disappointing, coming on the heels of strong gains in November and December. Anxiety over interest rates, inflation, oil prices and Iraq pressured stocks and kept many investors on the sidelines. For the month, the Dow fell 2.7%, the S&P; 500 dropped 2.5% and Nasdaq slumped 5.2%.
In economic news, personal incomes rose by 3.7% in December, according to the Commerce Department, up from 0.4% in November. Much of that gain was attributed to Microsoft’s special $3-a-share dividend paid out Dec. 2, which pumped $32 billion into the economy.
In other market highlights:
* MetLife fell 19 cents to $39.75, while Citigroup added 67 cents to $49.05. With the acquisition of Travelers, MetLife is poised to become the largest individual life insurer in North America, while giving Citigroup a stake in MetLife and a large infusion of cash.
* SBC Communications added 14 cents to $23.76 after finalizing its $16-billion agreement to acquire former parent AT&T.; AT&T; skidded 52 cents to $19.19.
* Time Warner edged 7 cents higher to $18, while Comcast lost 7 cents to $32.19. The companies have joined forces to make a $15-billion bid for Adelphia Communications.
* Davenport, Iowa-based newspaper publisher Lee Enterprises gained 64 cents to $44.55 after it agreed to buy Pulitzer for $1.46 billion in stock. Pulitzer climbed 56 cents to $63.46 on the news.
* Eastman Kodak added to the merger stream with a $980-million cash bid for Canadian printer-software manufacturer Creo as part of its move into digital imaging. Kodak added 39 cents to $33.09, while Creo surged $1.82 to $16.18.
