October 24, 2016/Reuters
U.S. stocks touched their highest levels in two weeks as a flurry of deal activity and strong quarterly earnings boosted investor confidence.
AT&T (T.N) was down 1.2 percent at $37.03 after the telecommunications company said it would buy Time Warner Inc (TWX.N) for $85.4 billion. If approved by regulators, this would be the biggest deal in the world this year. Time Warner Inc was down 1.8 percent at $87.84.
Investors are also parsing quarterly earnings reports from companies. More than a third of the S&P 500 components are scheduled to report earnings this week, including heavyweights such as Apple (AAPL.O) and Boeing (BA.N).
“M&A activity is generally seen as a bullish trend for the market,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.
“It’s also been a pretty good quarter for earnings so far and we might finally see the end of earnings recession. If you look at the companies that have reported so far, most of them have outperformed the long-term average in profit and revenue.”
Third-quarter earnings are expected to increase 1.1 percent after four consecutive quarters of contraction, according to Thomson Reuters data. Of the 120 S&P companies that have reported earnings, 77.5 percent have beat analyst expectations, above the long-term average of 63.5 percent.
At 10:56 a.m. ET, the Dow Jones industrial average .DJI was up 85.19 points, or 0.47 percent, at 18,230.9, the S&P 500 .SPX was up 10.32 points, or 0.48 percent, at 2,151.48 and the Nasdaq Composite .IXIC was up 46.63 points, or 0.89 percent, at 5,304.04.
Nine of the 11 major S&P sectors were higher, with technology index’s .SPLRCT 0.87 percent rise leading the advancers.
The dollar index DXY was little changed at 98.72 against a basket of major currencies, after touching its highest level since early February, last week. A strong dollar could dent the earnings of large multinationals.
Genworth Financial (GNW.N) was down 9.9 percent at $4.69 after little-known China Oceanwide Holdings Group pledged $3.8 billion in a deal to take control of the U.S. insurer.
TD Ameritrade (AMTD.O) fell 2.4 percent to $36.20 after it said it would buy privately held Scottrade Financial Services [SCTRD.UL] in a deal valued at $4 billion.
B/E Aerospace (BEAV.O) jumped 15.4 percent to $58.43 after aircraft component maker Rockwell Collins (COL.N) said it would buy the company in a deal valued at $6.4 billion plus the assumption of $1.9 billion in debt. Rockwell was down 5.7 percent at $79.64.
Advancing issues outnumbered decliners on the NYSE by 1,893 to 920. On the Nasdaq, 1,808 issues rose and 768 fell.
The S&P 500 index showed 17 new 52-week highs and two new lows, while the Nasdaq recorded 92 new highs and 25 new lows.
