Midday Dow at 11,269, up 77 points.
NEW YORK (AP) — Stocks rose Monday following a spike in
corporate dealmaking and news that retail sales jumped to the
highest level in seven months in October.
Consumer spending rose 1.2 percent last month thanks to higher
demand for automobiles, the Commerce Department reported. The gain
was nearly double what analysts were expecting. Shares of Ford
Motor Co. rose 5.5 percent following the annoucement.
Caterpillar, the world’s largest construction machinery maker, said
it would buy mining equipment maker Bucyrus International Inc. for
$7.6 billion in cash, a 32 percent premium over the company’s
closing price on Friday. Shares of Caterpillar rose 2.7
percent.
Data storage company EMC Corp. also announced that it had reached a
deal to buy competitor Isilon Systems Inc. for $2.2 billion in
cash. It is offering $33.85 per share, a 29 percent premium over
its closing price on Friday.
The push for mergers and acquisitions is a good sign for investors,
said Uri Landesman, the president of Platinum Partners, a hedge
fund in New York City. “It’s a statement that companies are moving
out from under the bombshells of 2008 and 2009 and that they don’t
think there will be another disaster,” he said.
Corporations are holding records amount of cash on their balance
sheets. Using that cash to buy rivals or to expand into new areas
could be a sign that companies are less concerned about the
possiblity that that economy will slide into another recession
soon.
The Dow Jones industrial average rose 66.07, or 0.6 percent, to
11,258.65 in afternoon trading.
