Stocks higher on mergers, GM bid
Stocks skipped higher Wednesday as investors were emboldened by decent earnings, a handful of mergers and billionaire investor Kirk Kerkorian’s bid to substantially add to his stake in General Motors Corp. The Dow Jones industrials soared almost 125 points.
The Dow closed up 127.69, or 1.2 percent, at 10,384.64, largely thanks to the 18 percent rise in GM’s share price.
Broader stock indicators were also higher. The Standard & Poor’s 500 index gained 14.48, or 1.25 percent, to 1,175.65. The Nasdaq composite index rose 29.16, or 1.5 percent, to 1,962.23.
The announcement that the government is considering bringing back the 30-year Treasury rattled the bond market, sending the yield on the 10-year note to 4.19 percent, up from 4.17 percent late Tuesday. Prices of the existing 30-year Treasury also sank. The 30-year note, discontinued in 2001, could provide financing for the government in an era of record budget deficits; a decision is expected in August.
The U.S. dollar fell Wednesday against other major currencies in European trading; gold prices rose. Oil futures rebounded from earlier lows, rising 63 cents to settle at $50.13 per barrel on the New York Mercantile Exchange after a weekly government report showed rising supplies of crude oil and gasoline.
“Oil is going to influence us every day, there’s no doubt. Any time we see some drop in oil prices, that’s good for the market,” said Michael Palazzi, managing director of equity trading at SG Cowen Securities. “I think there’s quite a bit of cash on the sidelines taking its cue from the positive news on GM, and from decent earnings projections.”
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange. Preliminary volume came to 1.8 billion shares, compared with 1.67 billion on Tuesday.
Overseas, Japanese financial markets were closed Wednesday for People’s Holiday, a national holiday. Trading will resume on Friday after the annual “golden week” holidays. In Europe, France’s CAC-40 rose 0.80 percent, Britain’s FTSE 100 was up 0.44 percent and Germany’s DAX index added 0.44 percent.