Stocks ended with tiny gains on Monday, as both the Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) finished higher by less than 0.1%.
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Financial stocks continued to trail the market after a quick run-up this year, and so the Financial Select Sector SPDR ETF (NYSEMKT: XLF) ended lower by 0.3%. Gold-based funds, meanwhile, attracted some of the heaviest trading volumes, and the volatile Direxion Junior Daily Gold Miners Bull 3X ETF (NYSEMKT: JNUG) gained 2% even as gold prices ticked down.
As for individual stocks, both Swift Transportation (NYSE: SWFT) and AT&T (NYSE: T) attracted heavy investor interest following merger and acquisition news.
Swift shares jump into high gear
Swift Transportation pre-announced details about its fiscal first quarter, but investors looked right past those figures to focus on the bigger news of the day: the trucking specialist's plan to merge with Knight Transportation . The two companies came to a deal that combines their businesses into an industry leader with $5 billion of annual revenue. It will operate under the name Knight-Swift Transportation and boast capacity of roughly 23,000 tractors and 77,000 trailers.
Swift shareholders are set to receive stock in the combined entity that, based on Knight's prior closing price, valued Swift at just over $22 per share. However, since Wall Street responded to Monday's news by bidding Knight's stock up as well, Swift's share price shot past that number to close at nearly $25, up almost 24% on the day.
The merger "brings together the most robust, respected and reliable truckload providers in North America," Swift CEO Richard Stocking said in a press release. The company's founder and controlling stockholder, Jerry Moyes, added, "I am confident that we have the right approach to maximizing the contribution of both teams."
The deal is expected to close sometime in the third quarter, after which the companies project booking synergies of $100 million in 2018 and $150 million in 2019.
AT&T preps for 5G speeds
AT&T shares ticked half a percent lower after the telecom giant made a $1.6 billion investment into its high speed network. The company announced it is purchasing Straight Path Communications , one of the largest holders of 28 GHz and 39 GHz millimeter wave spectrum.
The move "will support AT&T's leadership in 5G," the company explained in a press release, since it delivers licenses to valuable spectrum that covers the United States, including in all the top 40 markets. TheInternational Telecommunications Union believes 5G technology could eventually deliver download speeds up to 20 Gbps.
It's also just one piece of a much larger capital investment program. AT&T has invested $27 billion in spectrum over the past five years. "We have the premier spectrum position in the industry," CEO Randall Stephenson told investors in a a January earnings call.
AT&T structured the purchase as an all-stock deal, which is likely a win for the company given that its stock has outperformed the S&P 500 since 2016 and is currently valued at 19 times last year's earnings. Trading shares for Straight Path Communications thus frees up cash that the company can use to make future investments into preparing itself for ultra-high speed data demand. Investors can look for the acquisition to close sometime in the next 12 months following a review by the Federal Communications Commission.
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