By Anora Mahmudova and Victor Reklaitis, MarketWatch
Deal news for AT&T-Time Warner, B/E-Rockwell Collins,
Ameritrade and more
U.S. stocks trimmed earlier gains but were still higher on
Monday, getting a lift from merger announcements, including
AT&T's planned acquisition of Time Warner.
The S&P 500 gained 9 points, or 0.4%, to 2,150, with nine of
the 11 main sectors trading higher. Technology and consumer
discretionary sectors led the gains, while telecoms sold off.
The benchmark index is about 2% below its all-time high set on
Aug 15, having traded in a narrow range for the past two
months.
The Dow Jones Industrial Average advanced 80 points, or 0.5%, to
18,226 with Boeing Co.(BA), 3M Co. (MMM) and Microsoft Corp.(MSFT)
leading the gainers, up more than 1%.
The Nasdaq Composite Index added 45 points, or 0.9%, to
5,303.
"Companies spending their cash on mergers and acquisition is
good news for Wall Street. There is also a feeling that the
election outcome is mostly certain with Hillary Clinton becoming
the next president," said Steve Chiavarone, associate portfolio
manager at Federated Global Allocation Fund.
"Investors always pay higher prices for things they know even if
they don't like it and pay lower prices for things they don't
know," Chiavarone said.
Other analysts noted that technical analysis points to further
weakness, however.
"Despite strong earnings reports, U.S. indices increasingly look
like they are coming under distribution, particularly the S&P
500, which appears to be completing a head and shoulders top," said
Colin Cieszynski, chief market strategist at CMC Markets, in a
note. A head and shoulders pattern
(http://www.investopedia.com/terms/h/head-shoulders.asp) is a
bearish chart formation.
"Part of the headwinds for stocks may be coming from continued
gains by the [U.S. dollar], although the dollar index is starting
to look exhausted," Cieszynski said.
See: How the almighty dollar will tell you where stocks are
going next
(http://www.marketwatch.com/story/how-the-almighty-dollar-will-to-you-where-stocks-are-going-next-2016-10-21)
Shares in HBO and CNN parent Time Warner Inc.(TWX) dropped 2.2%
following news over the weekend that AT&T Inc.(T) had reached a
deal
(http://www.marketwatch.com/story/att-reaches-deal-to-buy-time-warner-for-80-billionplus-wall-street-journal-2016-10-22-14103223)
to buy the media company for $85 billion. AT&T shares fell
1.6%. The huge buyout looks set to face opposition no matter who
wins the U.S. presidential election, with Donald Trump and Hillary
Clinton both expressing skepticism
(http://www.marketwatch.com/story/both-clinton-trump-wary-of-att-time-warner-merger-2016-10-23).
T-Mobile US Inc.(TMUS) shares rallied 7.2% after posting a
better-than-expected profit
(http://www.marketwatch.com/story/t-mobile-shares-rise-5-after-company-posts-better-than-expected-q3-profit-2016-10-24).
Shares in B/E Aerospace Inc.(BEAV) jumped more than 15% after
Rockwell Collins Inc.(COL) on Sunday announced a $6.4 billion deal
(http://www.marketwatch.com/story/rockwell-collins-in-64-billion-deal-to-buy-be-aerospace-2016-10-23)
to unite the two aerospace suppliers. Rockwell Collins was down
6.9%.
Brokerage TD Ameritrade Holding Corp.(AMTD) and Toronto-Dominion
Bank(TD.T)(TD.T) confirmed they have agreed to buy
(http://www.marketwatch.com/story/td-ameritrade-td-bank-announce-4-billion-scottrade-takeover-2016-10-24)
privately owned brokerage Scottrade Financial Services for $4
billion. TD Ameritrade's stock was off by 3%.
Insurer Genworth Financial Inc.(GNW) has agreed to sell itself
for $2.7 billion () to a Chinese investment firm, China Oceanwide
Holdings Group Co. (0715.HK). Genworth was down 6.8%.
Shares of Basic Energy Services Inc. (BAS) plummeted 54% after
the operator of oil and gas wells announced an agreement with debt
holders as it prepares to file for bankruptcy.
Aduro Biotech Inc.(ADRO) shares fell 5% after the company said a
patient tested positive for listeria, prompting the Food and Drug
Administration to place its clinical trials on partial clinical
hold.
In earnings news, Kimberly-Clark Corp.(KMB) dropped 3.8% after
its quarterly profit missed forecasts, and VF Corp.(VFC) shares
declined 1.6% after the company cut its guidance
(http://www.marketwatch.com/story/vf-corp-shares-fall-after-guidance-slashed-2016-10-24).
Read more: Stock market this week looks to Apple, Google
earnings for jolt
(http://www.marketwatch.com/story/stock-market-looks-to-apple-google-earnings-for-jolt-2016-10-22)
Other markets: Oil futures traded lower following choppy action
as Iraq indicated it won't cut production
(http://www.marketwatch.com/story/oil-prices-fall-after-iraq-says-it-wont-scale-back-output-2016-10-24).
European stocks traded higher
(http://www.marketwatch.com/story/european-stocks-advance-with-spanish-shares-energized-by-political-deal-2016-10-24),
while Asian markets closed mostly with gains. Gold futures were
slightly down and a key dollar index traded slightly higher.
Economic news: Markit's purchasing managers' manufacturing index
climbed to 53.2 in October.
On the Fed front, St. Louis Fed President James Bullard
(http://www.marketwatch.com/story/fed-only-needs-to-nudge-up-interest-rates-despite-being-very-close-to-its-targets-bullard-says-2016-10-24)argued
that the Fed should raise interest rates slowly in the years ahead
as the real rate of interest is expected to remain subdued.
Fed Gov. Jerome Powell is scheduled to moderate a panel
discussion at the same conference at 1:45 p.m. Eastern.
(END) Dow Jones Newswires
October 24, 2016 12:30 ET (16:30 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.