While you were sleeping: Equities gain amid takeovers

Wall Street climbed, pushing the S&P 500 to a record high, as merger and acquisition activity helped underpin optimism that corporations still find value at these levels.

In afternoon trading in New York, the Dow Jones Industrial Average added 0.25 percent, the Standard & Poor’s 500 Index gained 0.48 percent, while the Nasdaq Composite Index climbed 0.67 percent. The S&P 500 touched a record high 2,051.25.

“Consumer and investor sentiment is pretty positive at the moment,” Omar Aguilar, the San Francisco-based chief investment officer of equities at Charles Schwab Investment Management, told Bloomberg News.

Advances in shares of UnitedHealth and those of Intel, up 1.8 percent and 1.6 percent respectively, helped propel the Dow higher. 

The latest merger and acquisition deals helped buoy the mood. On Monday, Actavis said it would buy Allergan for US$66 billion, while Halliburton announced its US$34.6 billion takeover of Baker Hughes.

"There is more space for M&A. Companies are looking for areas to have growth," Bruce Zaro, chief technical strategist at Bolton Global Asset Management in Boston, told Reuters. 

"Healthcare stocks are doing well, but not as a defensive play, and it is a positive that stock prices are strong and stocks are being used as currency," Zaro said.

The latest US housing data were solid too. Homebuilders’ confidence strengthened in November, with a National Association of Home Builders/Wells Fargo gauge rising to 58, up from 54 in October. 

It wasn’t all good news, however. Shares of Urban Outfitters sank, last 8.1 percent weaker, after the clothing retailer reported quarterly profit that fell short of expectations.

Shares of Home Depot fell, last 1.5 percent weaker, after the company posted its latest quarterly earnings and maintained its estimates for full-year sales and profit.

In Europe, the Stoxx 600 finished the session with a 0.6 percent advance from the previous close, as did the UK’s FTSE 100 Index. France’s CAC 40 increased 0.9 percent, while Germany’s DAX rallied 1.6 percent.

The ZEW Center for European Economic Research said its index of German investor and analyst expectations rose to 11.5 in November from minus 3.6 in October, the first increase this year.

Gold prices rose. Russia’s central bank has bought about 150 metric tons of gold this year, Governor Elvira Nabiullina told lawmakers on Tuesday, Bloomberg News reported. 

“News that Russia remains a strong buyer of gold does add some support to a market which has been struggling to find any friends during the past few months,” Ole Hansen, head of commodities strategy at Saxo Bank in Copenhagen, told Bloomberg News.

(BusinessDesk)