Tue, December 21, 2010
NEW YORK – Deals are back in focus, and that's pushing stocks higher.
Toronto-Dominion Bank agreed Tuesday to buy Chrysler Financial, the automaker's old lending arm, from private equity firm Cerberus Capital Management LP for $6.3 billion. Dutch chemicals company Royal DSM NV also says it plans to buy US biotech firm Martek Biosciences Corp. for $1.09 billion in cash.
At the opening Tuesday, the Dow Jones industrial average is up 31 points, or 0.3 percent, to 11,508. The Standard & Poor's 500 index is up 4, or 0.3 percent, to 1,250. The Nasdaq composite index is up 8, or 0.3 percent, to 2,657.
Bond prices are rising, pushing down yields. The yield on the 10-year Treasury note fell to 3.31 percent from 3.35 percent late Monday.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
NEW YORK (AP) — Positive momentum is setting the stage for a higher opening Tuesday on Wall Street amid another spate of corporate dealmaking.
Major indexes are edging up in pre-market trading after Toronto-Dominion Bank agreed to buy Chrysler Financial, the automaker's old lending arm, from private equity firm Cerberus Capital Management LP for $6.3 billion. Dutch chemicals company Royal DSM NV also says it plans to buy US biotech firm Martek Biosciences Corp. for $1.09 billion in cash.
A wave of positive momentum is also pushing stocks up. The Dow Jones industrial average has gained 4.3 percent this month and the Standard & Poor's 500 index has hit seven new annual highs since Dec. 8.
Investors have been encouraged by improving economic data on retail sales, as well as policy changes such as the extension of Bush-era tax cuts.
"There is growing optimism about the economy, or at least the U.S. economy, in 2011," said Alan Gayle, senior investment strategist for RidgeWorth Investments. "We're 18 months into this recovery, and good things are gradually happening."
Mostly upbeat earnings reports have also helped.
Software maker Adobe Systems Inc. on Monday posted earnings for its latest quarter that exceeded analyst expectations. The company also provided a rosy outlook, saying it expects to get a lift from the continuing e-book revolution, as publishers adopt its software tools.
Another technology company, Jabil Circuit Inc., said Monday its fiscal first-quarter net income more than tripled on stronger revenue. Jabil, which makes parts for electronics and other technology companies, issued higher-than-expected guidance for the current quarter.
Used car dealership chain CarMax Inc. said Tuesday its fiscal third-quarter net income rose more than 10 percent as an uncertain economy continued to boost sales of previously owned vehicles.
But ConAgra Foods Inc.'s second-quarter net income fell 16 percent after consumers didn't respond to the food maker's promotions.
Nike Inc., the world's largest athletic shoe maker, reports its latest quarterly results after the stock market closes.
Ahead of the opening bell, Dow Jones industrial average futures are up 50, or 0.4 percent, to 11,454. S&P 500 futures are up 5.80, or 0.5 percent, to 1,247. Nasdaq 100 futures are up 8.25, or 0.4 percent, to 2,228.50.
Bond prices are rising, pushing down yields. The yield on the 10-year Treasury note fell to 3.31 percent from 3.35 percent late Monday
The euro fell after Portugal became the latest European country to be warned of a possible credit rating downgrade.
Asian markets rose amid signs of easing tensions on the Korean peninsula. Japan's Nikkei 225 stock average closed up 1.5 percent, South Korea's Kospi advanced 0.8 percent and Hong Kong's Hang Seng index rose 1.6 percent.
(Agencies)
