By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market ended Monday's
choppy trading session slightly higher, as both the S&P 500 and
Dow Jones Industrial Average closed at record levels.
M&A deals between Tyson Foods Inc. and Hillshire Brands Co.;
Analog Devices Inc. and Hittite Microwave Corp.; and Merck &
Co. and Indenix Pharmaceuticals Inc. added to optimism on Wall
Street.
The S&P 500 (SPX) closed up 1.83 points, or 0.1%, to
1,951.27, hitting a record level for the 19th time this year.
The Dow Jones Industrial Average (DJI) rose 18.82 points, or
0.1%, to 16,943.10. The blue-chip index closed at a record level
for the 9th time in 2014.
The Nasdaq Composite (RIXF) ended the day up 14.84 points, or
0.3%, at 4,336.24.
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action.
Scott Wren, senior equity strategist at Wells Fargo Advisors,
said at current levels technicals and the fundamentals of the
S&P 500 are aligned.
"We've hit important support levels on the S&P 500 and
expect the market to continue to grind higher. Valuations are
stretched but still within the upper end of the historical
averages. We see this as technicals and valuations moving
together," Wren added.
There was no economic data set for release Monday, however, two
Federal Reserve officials delivered speeches. James Bullard, the
president of the St. Louis Fed, speaking Monday morning, said there
was evidence that inflation is now "moving higher." This is a
significant shift in Bullard's outlook; only last month he said
that inflation was stable and any uptick in price levels was just a
forecast.
Boston Fed President Eric Rosengren, a nonvoting member of the
policy committee, said that a cautious and predictable exit plan
might be the best way to avoid a market tantrum over higher
interest rates.
In deal news, Tyson Foods (TSN) confirmed on Monday that it will
buy Hillshire Brands Co.(HSH) for $8.55 billion in cash. Tyson has
been battling rival Pilgrim's Pride Corp. (PPC) in a protracted war
for Hillshire. Tyson shares fell 6.5%, while Hillshire gained 5.3%.
Shares in Pilgrim's Pride fell 6.7%.
Chip maker Analog Devices Inc. (ADI)said Monday that it will buy
Hittite Microwave Corp.(HITT) for $78 per share in cash. Hittite is
a designer and manufacturer of integrated circuits, modules and
instruments for radio frequency. Hittite shares soared 29%. Shares
in Analog Devices rose 5%.
Merck & Co. Inc.(MRK) said it will buy Idenix
Pharmaceuticals Inc.(IDIX) for $24.50 a share. The Merck buyout
values Idenix at $3.85 billion, and Idenix shares more that tripled
on the news.
Apple Inc. (AAPL) gained 1.6% to $93.70, as shares began trading
following a 7-for-1 stock split Friday.
Family Dollar Stores Inc. (FDO) surged 13% after billionaire
investor Carl Icahn on Friday disclosed a 9.4% stake in the
cut-price retailer late Friday. Rival retailer Dollar General Corp.
(DG) rose 7.4%.
In overseas markets, European stocks closed higher. Asian
markets closed mostly higher, taking their cue from healthy Chinese
export data.
Gold for August delivery (GCQ4) settled with a modest gain on
Monday, holding above $1,250 an ounce for a third straight session.
Oil futures (CLN4) climbed above $104 a barrel on Monday to settle
at their highest level since early March.
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