Wave of deals lead US stocks higher; tech companies jump
NEW YORK (AP) -- U.S. stocks are higher Monday afternoon following a series of corporate deals. AT&T is falling as investors wonder if its plan to buy Time Warner for $85.4 billion will be approved by regulators. Technology companies are making the largest gains while energy companies fall with the price of oil.
KEEPING SCORE: The Dow Jones industrial average gained 72 points, or 0.4 percent, to 18,217 as of 3:20 p.m. Eastern time. The Standard & Poor's 500 index rose 9 points, or 0.4 percent, to 2,150. The Nasdaq composite climbed 47 points, or 0.9 percent, to 5,304.
HOLD THE PHONE: Over the weekend telecom giant AT&T agreed to buy Time Warner, the entertainment conglomerate that owns HBO, CNN and Warner Bros. Time Warner jumped almost 8 percent Friday but gave back some of those gains Monday. It's far below the $107.50 AT&T has agreed to pay.
Both presidential tickets and other political figures have already expressed skepticism about the deal, and some are already opposed to it. Meanwhile investors worried about the high price AT&T is paying and the large amount of debt it would take on. AT&T, which bought DirecTV for $48.5 billion last year, already has about $117 billion of long-term debt.
AT&T fell 71 cents, or 1.9 percent, to $36.77 while Time Warner lost $2.44, or 2.7 percent, to $87.05.
THE QUOTE: "Any time you see a lot of IPOs, a lot of merger activity, it boosts confidence," said Karyn Cavanaugh, senior markets strategist for Voya Investment Strategies. Cavanaugh said the burst of deals could help stocks even if AT&T is never able to buy Time Warner.
LIFTOFF: Aviation electronics company Rockwell Collins agreed to buy commercial aircraft and business jet maker B/E Aerospace for $62 a share, or $6.4 billion in cash and stock. B/E Aerospace climbed $8.04, or 15.9 percent, to $58.65 while Rockwell Collins gave up $5.26, or 6.2 percent, to $79.20.
TECH GAINS: Microsoft, which is trading at all-time highs, rose $1.13, or 1.9 percent, to $60.79. Alphabet, Google's parent company, picked up $10.94, or 1.3 percent, to $835 and Apple added 79 cents to $117.39. Apple will make its quarterly report late Tuesday, while Alphabet will follow suit on Thursday.
Tech stocks have done very well over the last few months and that could continue as more companies report their earnings. S&P Global Market Intelligence says analysts think earnings for tech companies will grow 6 percent in the third quarter. Earnings for the S&P 500 are expected to rise less than 1 percent.
CLICK, DEAL: TD Ameritrade will combine with competitor Scottrade at a time when investors are choosing index funds over stock picking. In a linked deal, TD Bank will combine with Scottrade Bank. The two moves were valued at $4 billion in total. TD Ameritrade slid $1.23, or 3.3 percent, to $35.85.
GIMME: China Oceanwide Holdings agreed to buy financial services firm Genworth Financial for $5.43 per share, or $2.7 billion. Genworth stock worth about $25 a share at the end of 2007, before the financial crisis. It fell about 50 percent in 2014 and again in 2015 and slid further Monday, losing 43 cents, or 8.3 percent, to $4.78.
OIL: Benchmark U.S. crude lost 33 cents to $50.52 a barrel in New York after falling more than 2 percent earlier in the session. Brent crude, the international standard, fell 32 cents to $51.46 a barrel in London. Chevron declined 87 cents to $100.43 and Anadarko Petroleum slid 71 cents, or 1.1 percent, to $62.83.
DIALED IN: Wireless carrier T-Mobile jumped after reporting better-than-expected results for the third quarter. The company said it gained 2 million customers over the last three months and said it expects greater growth for the year. T-Mobile gained $4.48, or 9.6 percent, to $51.23. It hadn't traded above $50 a share since 2007.
CONSUMER CLIMBERS: Consumer companies also did better than the broader market. Amazon picked up $16.25, or 2 percent, to $835.25 and General Motors gained 95 cents, or 2.9 percent, to $32.99. PepsiCo rose $1.94, or 1.8 percent, to $107.57 while rival Coca-Cola added 54 cents, or 1.3 percent, to $42.67.
NEED SOME TISSUES: Consumer products maker Kimberly-Clark fell $5.62, or 4.7 percent, to $113.95. That was its biggest loss in more than a year. The maker of consumer products such as Huggies diapers and Kleenex tissue reported weak results for the quarter and cut its annual sales forecast. The stock reached all-time highs in early July but has fallen 17 percent since then.
CURRENCIES: The dollar rose to 104.22 yen from 103.85 yen. The euro edged up to $1.0878 from $1.0871.
BONDS: Bond prices slipped. The yield on the 10-year Treasury note rose to 1.76 percent from 1.74 percent.
OTHER ENERGY TRADING: Wholesale gasoline dipped 3 cents to $1.50 a gallon. Heating oil remained at $1.58 a gallon. Natural gas dropped 16 cents, or 5.4 percent, to $2.83 per 1,000 cubic feet.
METALS: Gold lost $4 to $1,263.70 an ounce and silver rose 1 cent to $17.60 an ounce. Copper remained at $2.09 a pound.
OVERSEAS: Germany's DAX gained 0.5 percent and the CAC 40 in France added up 0.4 percent. The FTSE 100 of Britain lost 0.5 percent. Hong Kong's Hang Seng jumped 1 percent while Japan's Nikkei 225 rose 0.3 percent and the Kospi in South Korea climbed 0.7 percent.