Stocks rise on takeover news
U.S. stocks rose Monday, with the Dow Jones industrials and the Standard & Poor’s 500 index eking out closing records as higher energy shares and a fresh round of takeover news offset concerns about a sharp sell-off in Chinese stocks.
The Shanghai composite index plummeted 8.3%, its biggest one-day drop since a Feb. 27 plunge that set off a brief global stock sell-off. Monday’s drop brought the Shanghai market 15% below its record close May 29, the day after which the Chinese government tripled a tax on stock trades to rein in rampant speculation.
But unlike in February, Shanghai’s declines last week and Monday had a limited effect on stock markets elsewhere in Asia or the rest of the world.
The U.S. market, however, was in negative territory for much of the day in the wake of a weaker-than-expected report on factory orders as well as the sell-off in China.
“I think you’re seeing a combination of investors wanting to take some profit on a Monday morning and some fear because of what happened in China,” said Ryan Detrick, a senior technical strategist for Schaeffer’s Investment Research.
The Dow industrials edged up 8.21 points to 13,676.32. The S&P; 500 index rose 2.84 points, or 0.2%, to 1,539.18.
The Nasdaq composite index gained 4.37 points, or 0.2%, to 2,618.29, while the Russell 2,000 index of smaller-company stocks rose 1.68 points, or 0.2%, to 855.09.
Advancing issues outnumbered decliners by about 4 to 3 on the New York Stock Exchange.
As the Dow and S&P; 500 again snagged record closes, the S&P; moved closer to its intraday trading high of 1,552.87, set in March 2000. Last week, the Dow posted a 1.2% gain, the S&P; rose 1.4% and Nasdaq added 2.2%.
Bond yields fell as the factory-order report raised expectations of an interest rate cut this year. The yield on the 10-year Treasury bond fell to 4.93% from 4.95% late Friday. The manufacturing report showed orders up 0.3% in April, less than the 0.7% rise economists had expected.
The dollar slipped against other major currencies, and gold prices fell.
Oil prices jumped after union officials in Nigeria’s oil and gas industry said they planned to support a general strike, and a U.S. gasoline pipeline was restarted. Crude futures rose $1.13 to $66.21 a barrel on the New York Mercantile Exchange.
Energy shares in the S&P; 500 climbed 1.2% as a group for the best gain among 10 industries.
In deal news, shares of San Diego-based Accredited Home Lenders surged $1.36, or 9.9%, to $15.12 after it agreed to be acquired by private equity firm Lone Star for $400 million.
Smart-phone maker Palm said it had received a $325-million investment from private equity firm Elevation Partners and announced a shake-up of its board. Palm shares surged $1.48, or 9.2%, to $17.57.
Publisher Dow Jones fell $1.04, or 1.7%, to $60.16 as the family that controls the company met with Rupert Murdoch about the possibility of an acquisition. Murdoch’s News Corp. has offered $60 a share for the company.
Natural-gas company Atlas Pipeline Holdings soared $8.14, or 26%, to $39.56 after a company it controls, Atlas Pipeline Partners, agreed to buy some facilities from Anadarko Petroleum for $1.85 billion.
Anadarko advanced $2.30, or 4.6%, to $51.95. Atlas Pipeline Partners climbed $3.33, or 6.4%, to $55.05.
XTO Energy climbed $3.24, or 5.6%, to $61.61. The oil and natural gas producer and Loews, a holding company owned by New York’s Tisch family, agreed to buy oil and gas exploration assets from Dominion in separate transactions.
Loews gained $1.33, or 2.6%, to $52.35. Dominion rose 23 cents to $87.87.
Solectron rose 51 cents, or 15%, to $3.88 after rival Flextronics International said it would buy the contract electronics maker for about $3.6 billion in cash and stock. Flextronics fell 16 cents, or 1.4%, to $11.54.
In other market highlights:
* Wal-Mart Stores rose $1.74, or 3.5%, to $51.21 after several brokerages upgraded the stock, citing the retailer’s announcement last week of a stock buyback and a scaling back of its store-opening plans.
* Continental Airlines, UAL and AMR fell after jet-fuel prices rose for a fourth straight day and a Continental monthly report raised concerns that revenue might fall short of expectations.
Continental shares dropped $2.43, or 6.1%, to $37.45. UAL, parent of United Airlines, declined $2.57, or 2.6%, to $36.21. AMR, the owner of American Airlines, slid $1.38, or 4.8%, to $27.09.
* Apple shares gained $2.93, or 2.5%, to $121.33 after word that the company’s highly anticipated iPhone would be available June 29.
* Krispy Kreme Doughnuts fell 58 cents, or 6.7%, to $8.09 after the chain reported a wider loss and lower revenue for the first quarter.
* Overseas, key stock indexes rose 0.1% in Japan and fell 0.2% in Britain, 0.1% in Germany and 0.7% in France.
