Stock market: Corporate deals provide a boost
Stock market opened higher Monday after dipping below 12000 Friday. A number of corporate deals are boosting the stock market.
Specialist Joseph Dreyer (right) works at his post on the floor of the New York Stock Exchange June 13, 2011. The stock market rose Monday morning, helped by the announcement of several corporate deals.
Richard Drew/AP
NEW YORK – A flurry of corporate deals is helping to lift the stock market after six weeks of declines.
Stocks rose on Monday after Wendy's/Arby's Group said it would sell control of its Arby's business to a private equity firm that owns several other quick service franchises, including Moe's Southwest Grill and Auntie Anne's. VF Corp., whose brands include Wrangler and The North Face, also said it would buy boot maker Timberland for more than $2.2 billion.
The deals gave investors some much-needed confidence the economy is not entirely stalled. Wendy's rose 6 percent and VF rose 12 percent in early trading.
The Dow Jones industrial average rose 43 points, or 0.4 percent, to 11,996.
The Standard & Poor's 500 rose 4, or 0.3 percent, to 1,275. The Nasdaq composite index rose 8, or 0.3 percent, at 2,652.
Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc., said some kind of a boost in the stock market was natural given last week's declines. "Today, we're looking at a little bit of a bounce," he said.
Weak economic news has sent stocks lower for six straight weeks. Investors have been worried about a dismal housing market, a slowing manufacturing industry and a sluggish jobs market for weeks.
On Friday, the Dow fell below 12,000 for the first time since March. The Dow and the S&P 500 are down 5 percent so far this month, while the Nasdaq is down 6 percent.
Later in the week, reports on retail sales, business inventories, consumer prices and industrial production will provide an update on the economic recovery. Electronics retailer Best Buy Co., grocery Kroger Co. and BlackBerry maker Research in Motion Ltd. will also release their earnings results.
In corporate news, Forest Laboratories Inc. rose 3 percent after the drugmaker said a fund affiliated with billionaire investor Carl Icahn plans to nominate four directors to the company's board.
Overseas, the FTSE 100 index of leading British shares rose 0.4 percent to 5,788.37, while France's CAC-40 edged up 0.5 percent to 3,824.64. Germany's DAX rose 0.6 percent to 7,108.63.