U.S. Indexes Trade Modestly Higher, Extending Friday's Gains; Deals Top Market News

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Stocks are modestly higher in mid-day trading in a relatively quiet day due to the Columbus Day holiday closing Federal offices and bond trading. With no economic data due for the day, investors are left to take stock of the Dow's Friday closing above 11,000.

Investors will be looking to the Federal Reserve Open Market Committee meeting minutes which will be released at 2pm EST Tuesday. There is a growing sense among Fed observers that the central bank will announce additional monetary stimulus following relatively disappointing employment numbers released last week.

Deal news topped investor interest to begin the week.

Gymboree ( GYMB ) is trading sharply higher on news the company will be bought for $65.40 per share in cash by Bain Capital. The deal is valued at $1.8 billion. Under the deal, Gymboree shareholders will get $65.40 in cash for each share held. The makes the price a premium of 23.5 percent to the stock's Friday closing price.

Also, retailer Dollar Tree ( DLTR ) announced that it has signed a definitive agreement to purchase the assets of Canada's Dollar Giant Store in Dollar Tree's first expansion of its retail operations outside of the United States, according to a company statement. According to the detail, Dollar Tree will acquire 85 Dollar Giant stores including substantially all assets, inventory, leasehold rights and intellectual property for approximately $52 million (CAD) in cash, the statement said.

DineEquity Inc ( DIN ) is on the rise after it said it will sell 36 company-owned Applebee's Neighborhood Grill & Bar restaurants to Mid River Restaurants LLC for about $26 million after tax. The restaurant group which also operates IHOP expects the deal to close by the fourth quarter. The restaurants sold are based in Virginia, Missouri, and Illinois.

In other Monday news, Microsoft Corp., ( MSFT ) unveiled nine phone handsets that will run the Windows Phone 7 and will be available during the holiday season in Europe, North American and the Asia-Pacific region, according to a statement from the company. The phones are being made by HTC Corp. Dell Inc. ( DELL ), Samsung Electronics and LG Electronics. The software on the phone arranges activities into tiles that update with new information, Bloomberg reported.

Meanwhile, Google ( GOOG ) shares are higher following news the Internet search company has been experimenting with a car that drives itself. The company said its automated cars use video cameras, radar sensors and a laser range finder to "see" other traffic, according to the blog. "This is all made possible by Google's data centers, which can process the enormous amounts of information gathered by our cars when mapping their terrain," the company said.

Elsewhere in the market, Afinitor, a kidney cancer drug made by Novartis AG ( NVS ), did not meet the intended goal of a late-stage clinical trial, Bloomberg reported, citing researchers. The drug, combine with the company's Sandostatin drug, did not stop neuroendocrine tumors from growing, the report said.

Shares of Jazz Pharmaceuticals, Inc. ( JAZZ ) are higher despite an announcement that the U.S. Food and Drug Administration (FDA) has sent the company a complete response letter ( CRL ) regarding the company's New Drug Application (NDA) for JZP-6 (sodium oxybate) for the treatment of fibromyalgia.

ATP Oil & Gas Corp. ( ATPG ) said one of its deepwater wells in the Gulf of Mexico has begun producing at better-than-expected levels, reported Reuters. ATP said that its Mississippi Canyon 941 no. 3 well had made a production rate of over 7,000 barrels of oil a day, reported Reuters. In August, ATP had posted a worse-than-expected Q2 loss and said there would be project delays because of the drilling moratorium put in place by the federal; government following the BP Plc ( BP ) oil spill earlier in the year.

The New York Times Co. ( NYT ) has made a strong advance following a report ahead of Q3 earnings that print advertising declines have been shrinking while digital revenue is posting double-digit growth after falling during the recession.

Commodities are mixed as December gold contracts rose $4, or 0.28%, to $1,349 an ounce while November crude contacts are down 0.32%, or $0.23, at $82.43 a barrel.

In energy ETFs, the United States Oil Fund ( USO ) is down $0.22, or 0.61% to $35.93 and the United States Natural Gas fund ( UNG ) is down 0.70% to $5.79.

In precious metal ETFs, the SPDR Gold Trust ( GLD ) is up 0.11% to $131.81. Market Vectors Gold Miners ( GDX ) is down 0.72% to $56.87. iShares Silver Trust ( SLV ) is down 0.09% to $22.71.



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