Stocks extended their advance into a third session yesterday on news of dropping oil prices and a bevy of corporate mergers. Oil prices fell for...
NEW YORK — Stocks extended their advance into a third session yesterday on news of dropping oil prices and a bevy of corporate mergers.
Oil prices fell for the third straight day, sliding more than $1 a barrel after Hurricane Dennis missed key Gulf of Mexico refineries, averting a disruption in fuel supplies. Wall Street has been nervously watching oil prices, worried that further increases would curb consumer spending and chip away at corporate profits.
News of corporate deals in telecom, banking and pharmaceuticals boosted stocks, too, stoking investors’ hopes that second-quarter earnings might be stronger than expected.
Investors welcomed the deals as a sign that companies feel secure enough to spend some of the cash they accumulated during the earnings run-up of the past two years. Standard & Poor’s 500 companies, for instance, have the largest cash reserve in the S&P’s history.
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The Dow Jones industrial average rose 70.58, or 0.7 percent, to 10,519.72.
In Northwest stocks, Boeing fell 10 cents, closing at $64.97. Microsoft was up 20 cents, to $25.29.
Broader stock indicators also rose. The S&P 500 index rose 7.58, or 0.6 percent, to 1,219.44. The index is now higher for the year. The Nasdaq composite index rose 22.55, or 1.1 percent, to 2,135.43.
The Russell 2000 index of smaller companies is at an all-time high. It rose 9.60, or 1.4 percent, to 671.74, as investors flock to specialized small-cap companies, which are seen as an alternative to larger companies that are more vulnerable to swings in oil prices.
Bonds rose slightly, with the yield on the 10-year Treasury note at 4.10 percent, compared to 4.11 percent late Friday. The U.S. dollar fell against other major currencies. Gold prices were higher.
Stocks stayed within the narrow trading range of the last year and a half.
“The market is just kind of waiting,” said Bob Baur, managing director and head of global trading at Principal Global Investors. “They’re waiting for the Fed to stop raising rates, they’re waiting for earnings to slow, they’re waiting for oil to stop rising.”
Yesterday’s deals included a report that Goldman Sachs Group and German financial firm Allianz are in talks to buy a $1 billion-plus stake in one of China’s largest state-owned commercial banks. Drug distributor McKesson said it would buy a smaller regional distributor and Dutch media company VNU NV said it would buy U.S.-based health-care-data provider IMS Health in a cash and stock deal valued at more than $6 billion.
Other companies involved in deals gained as well. IMS rose 61 cents to $26.50. McKesson rose 66 cents to $45.21, and the regional distributor it is buying, D&K Healthcare Resources, rose $5.80 to $14.30.
Procter & Gamble shares rose 94 cents to $53.90, lifted by a brokerage note from Prudential Equity Group predicting its stock price will rise once it completes its acquisition of Gillette. And DuPont rose 65 cents to $44.15 after Deutsche Bank upgraded its stock.
Morgan Stanley rose 45 cents to $53.57 after it announced Co-President Stephen Crawford resigned from the financial-services firm, while Co-President Zoe Cruz was appointed acting president.