Merger and acquisition activities and a rally in health
insurers took benchmarks to their record highs on Monday. A
buoyant German confidence report also had a positive impact on
the markets. The benchmarks ended in the green with the S&P
500 briefly reaching its all-time high. The Nasdaq ended the day
at a fourteen-year high.
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Ahead of Wall Street
The Dow Jones Industrial Average
(DJI) gained 0.6% to close Monday's
trading session at 16207.14. The Standard & Poor 500 (S&P
500) too moved up 0.6% to finish at 1847.61. The tech-laden
Nasdaq Composite Index rose 0.7% to move up to 4292.97. The
fear-gauge CBOE Volatility Index (VIX) dropped 3.1% to settle at
14.23. Total volume on the New York Stock Exchange was 4
billion shares. Advancers outpaced the decliners on the NYSE. For
59% stocks that gained, 37% stocks closed lower on the NYSE.
The S&P 500 had surged to
an intraday record high of 1858.71
. Though the index failed to hold on to the record, it finished
with decent gains buoyed by strength in health insurance
companies. Humana Inc. (NYSE:
) led the gains among its peers as its shares jumped 10.6% to
$113.69. The largest US health insurer UnitedHealth Group
) moved up almost 3% to $76.01.
Shares of Aetna Inc. (NYSE:
), WellPoint Inc. (NYSE:
) and Tenet Healthcare Corp. (NYSE:
), key rivals of Humana and UnitedHealth Group, advanced 1.9%,
2.7% and 3.1%, respectively. Overall the Health Care Select
Sector SPDR (XLV) rose 0.8%.
New deals also lifted the mood among the investors. Jos. A. Bank
Clothiers, Inc. (NASDAQ:
) shares surged 9.1% after The Men's Wearhouse, Inc. (NYSE:
) agreed to increase the cash tender offer for Jos. A. Bank
Clothiers shares from $57.5 per share to $63.5 per share. This
offer is based on the condition that Jos. A. Bank Clothiers, Inc.
must terminate the deal to acquire Eddie Bauer. Men's Wearhouse
shares also soared 7.5%.
There was also some merger and acquisition activity in the
Technology sector as TriQuint Semiconductor (NASDAQ:
) said it will merge with RF Micro Devices, Inc. (NASDAQ:
). Shares of these semi-conductor companies TriQuint
Semiconductor and RF Micro Devices, Inc. rallied 26.1% to close
at $11.64 and 21% to end at $7.0, respectively. The companies
expect the all-stock transaction to create annual revenues of
more than $2 billion for the combined company.
On the whole the Technology Select Sector SPDR (XLK) went up
0.4%. However, many of its large components such as Cisco Systems
), QUALCOMM, Inc. (NASDAQ:
) and Microsoft Corporation (NASDAQ:
) fell 0.1%, 0.2% and 0.8%, respectively.
Upbeat German business confidence for the fourth straight month
also boosted the sentiment. The Ifo business climate index rose
to 111.3 in February from 110.6 in January, better than the
expected figure of 108.3, suggesting growth in industry and
Coming back to the sectors, eight out of ten S&P 500 sectors
gained with the energy sector taking the lead. The Energy Select
Sector SPDR (XLE) gained 1.5%. Stocks from the sector such as
Exxon Mobil Corporation (NYSE:
), Chevron Corporation (NYSE:
), Schlumberger Limited. (NYSE:
) and Occidental Petroleum Corporation (NYSE:
) climbed 1.5%, 1.3%, 2.9% and 0.7%, respectively.