By Anora Mahmudova and Wallace Witkowski, MarketWatch
Deal news for AT&T-Time Warner, B/E-Rockwell Collins,
Ameritrade and more
U.S. stocks pulled back from session highs but ended with gains
Monday, getting a lift from a heavy round of merger announcements,
including AT&T's planned acquisition of Time Warner.
The S&P 500 closed up 10.17 points, or 0.5%, at 2,151.33,
with eight of the 11 main sectors finishing higher. The tech,
consumer-discretionary and consumer-staples sectors led the gains,
while telecoms and energy sold off. Earlier, the index had been up
nearly 14 points.
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 77.32 points, or 0.4%,
to finish at 18,223.03 with shares of Microsoft Corp.(MSFT) Boeing
Co.(BA) and Wal-Mart Stores Inc. .(WMT) leading the gainers, up
more than 1%. Early in the session, the average had been up by as
many as 129 points.
The Nasdaq Composite Index , on the other hand, closed near its
session high, adding 52.42 points, or 1%, to finish at 5,309.83,
after touching an intraday high of 5,311.50.
"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) closed down
3.1% 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
1.7%. 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 finished up 9.5% 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 16% 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
6.2%.
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 4.4%.
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 shares closed down 8.1%.
Shares of Basic Energy Services Inc. (BAS) plummeted 51% after
the operator of oil and gas wells announced an agreement with
debtholders as it prepares to file for bankruptcy.
Aduro Biotech Inc.(ADRO) shares fell 5.1% 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 4.7% after
its quarterly profit missed forecasts, and VF Corp.(VFC) shares
declined 2.9% 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 ended 0.7% lower at $50.52 a barrel
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
(http://www.marketwatch.com/story/gold-churns-after-weekly-gain-as-dollar-steadies-stocks-point-higher-2016-10-24)
settled down 0.3% at $1,263.70 an ounce and a key dollar index
traded slightly higher.
See:5 things OPEC needs to do to reach an oil output pact
(http://www.marketwatch.com/story/5-things-opec-needs-to-do-to-reach-an-oil-output-pact-2016-10-24)
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.
In a speech to the University Club in Chicago on Monday, Chicago
Fed President Charles Evans
(http://www.marketwatch.com/story/feds-evans-wants-to-tie-pace-of-interest-rate-hikes-to-inflation-performance-2016-10-24)
said the central bank should tie the pace of interest rate
increases to inflation.
--Victor Reklaitis in London contributed to this report.
(END) Dow Jones Newswires
October 24, 2016 16:16 ET (20:16 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.