Equity
markets surged Thursday as a mix of M&A deals, stronger-than-expected earnings from companies including Motorola Inc. (NYSE:MOT) and Goodyear Tire & Rubber Co. (NYSE:GT) and positive economic news put investors in a bullish frame of mind.
On the economic front, unemployment numbers weren't as bad as expected. The Labor Department said initial claims for jobless benefits climbed 25,000 to 584,000 -- less than the 34,000 jobless claims were
expected by economists to rise. The tally of continuing claims drawn by workers for more than a week fell 54,000 in the week ended July 18 to 6,197,000, the lowest since April 11.
The bond market got some relief Thursday, when a $28 billion auction of seven-year Treasury notes went
better than expected.
The Nasdaq briefly topped 2,000 mark Thursday afternoon for the first time since October 2008, as investors seem hopeful that technology stocks will go back to their fast-growing ways if an economic recovery is indeed in the works.
Shares of Yahoo! Inc. (NASDAQ:YHOO) were down again slightly, but not enough to offset gains by the exchange's other heavy hitters including Google Inc. (NASDAQ:GOOG), Microsoft Corp. (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL), all of which
advanced. All three are seen as being in position to benefit greatly if and when a recovery comes.
Meanwhile, the Dow tacked on more than 150 points by midafternoon as General Electric Co. (NYSE:GE) received a boost when it got an upgrade to "buy" from "neutral" from an analyst at Goldman Sachs Group Inc. (NYSE:GS). The diminished risk that regulatory overhaul will force a divestment of GE Capital prompted the upgrade.
Investors were also encouraged by a strong surge in M&A activity this week. Over the past three days there have been big deals in financial, pharmaceuticals and technology sectors.
Among them are:
- Sanofi-Aventis SA (NYSE:SNY) agreed to pay $4 billion in cash to Merck & Co. (NYSE:MRK) for its share in the animal health joint venture Merial. (The Deal Pipeline subscribers can read the full story here.)
- Agilent Technologies Inc. (NYSE:A) announced a deal to acquire Varian Inc. (NASDAQ:VARI) for $1.5 billion in cash, giving a 35% premium to Varian's Friday closing price. (The Deal Pipeline subscribers can read the full story here.)
- IBM Corp. (NYSE:IBM) bought predictive analytics software maker SPSS Inc. (NASDAQ:SPSS) for $50 a share in cash, or about $1.2 billion. (The Deal Pipeline subscribers can read the full story here.)
- Citigroup Inc. (NYSE:C) sold Nikko Asset Management to Sumitomo Trust & Banking for $1.1 billion. (The Deal Pipeline subscribers can read the full story here.)
- Cell-phone maker Ericsson AB snagged Nortel Network Corp.'s prized mobile infrastructure assets with a $1.13 billion bid. (The Deal Pipeline subscribers can read the full story here.)
For more on the stocks we're tracking, see Deal Stock. -
George White
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