Wall St gains for 3rd day on M&A, Europe hopes
Stocks gained for a third day on Monday after last week’s wild swings on U.S. deal news and speculation European leaders may get control of the euro zone’s debt problems.
The market’s somewhat firmer footing follows weeks of volatility and a selloff that put the S&P 500 in negative territory for the year.
The benchmark index is still considered in a correction, having lost 12.6 percent since its April 29 highs due to concerns about U.S. fiscal policy, Europe’s debt woes and the downgrading of the United States’ top-notch credit rating.
Among the day’s biggest gainers, Motorola Mobility Holdings Inc jumped nearly 57 percent to $38.25 on Google Inc’s offer to buy the company for about $12.5 billion in cash. Google dropped 2.6 percent to $549.19.
“You’re seeing kind of a reversal from last week in financials,” said Thomas Villalta, portfolio manager for Jones Villalta Asset Management in Austin, Texas. That “speaks to underlying fundamentals” of the businesses involved.
But the sharp ups and downs of last week could return, he said, as Europe’s concerns weigh.
“Europe has been extraordinarily slow in taking any sort of decisive action to improve perceptions … that means to me we could have volatility through the end of the quarter.”
A meeting on Tuesday by French and German political leaders was expected to result in initiatives needed to restore confidence in credit and other markets.
The S&P financial index rose 2 percent.
The Dow Jones industrial average was up 121.66 points, or 1.08 percent, at 11,390.68. The Standard & Poor’s 500 Index was up 15.03 points, or 1.28 percent, at 1,193.84. The Nasdaq Composite Index was up 21.28 points, or 0.85 percent, at 2,529.26.
In other takeover news, Time Warner Cable Inc will buy cable operator Insight Communications from Carlyle Group for $3 billion in cash to broaden its presence in the Midwest. Time Warner declined 1.1 percent to $64.78.
(Reporting by Caroline Valetkevitch; Additional reporting by Rodrigo Campos; Editing by Kenneth Barry)
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