Stocks Surge on M&A Deals, Cheery Consumers

U.S. stocks rose Friday giving the Dow and the S&P 500 seven straight weeks of gains and pushing the Dow to a record close, as more takeover activity and consumer sentiment data improved the outlook for equities.

The Dow Jones industrial average shot up 79.81 points, or 0.59 percent, at end at a record 13,556.53. The Standard & Poor's 500 Index gained 10.00 points, or 0.66 percent, to 1,522.75. The Nasdaq Composite Index rose 19.07 points, or 0.75 percent, to 2,558.45.

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For the week, the Dow gained 1.7 percent and the S&P 500 rose 1.1 percent, while the Nasdaq slipped 0.2 percent.

The Dow's record high close is its 24th this year. During the session, the Dow hit an intraday high of 13,558.48.

A gauge of consumer sentiment rose more than expected in May despite rising gasoline prices and reassured investors about the economy's strength.

The S&P 500 came within five points of a record closing high, which it set in March 2000. Both the Dow and the S&P 500 rose for a seventh straight week, their longest winning streaks since late 2003.

Shares of General Electric Co. (GE) notched their biggest gain in three weeks on news the conglomerate was close to selling its plastics unit for almost $11 billion.

In other takeover news, Microsoft Corp. (MSFT) said it would buy Internet marketing company aQuantive Inc.

"You're seeing a lot of buyouts, and that makes stocks look attractive," said Steve Goldman, market strategist at Weeden & Co. in Greenwich, Connecticut. "Stock prices have been marching higher with the feeling the economy is no longer accelerating to the downside and probably has stabilized."

Analysts see deals as underscoring a view that stocks still offer value despite the market's steady climb.

Latin American stock indexes also rose to new highs, with benchmarks in Mexico and Brazil hitting records.

Exxon Mobil Corp. (XOM) stock gained 1.8 percent to $83.26 on the New York Stock Exchange and hit a lifetime high of $83.33. It was the S&P's top advancer, following gains in crude oil prices. NYMEX crude for June delivery rose 8 cents to settle at $64.94 a barrel amid concerns about maintenance shutdowns and other interruptions of operations at U.S. refineries.

Shares of International Business Machines Corp. (IBM) led the Dow industrials. IBM rose 2.5 percent to $107.99 after brokerage UBS raised its price target on the stock of the world's biggest computer services company to $124 from $118 and kept a "buy" rating.

GE rose 1.2 percent to $36.96 on the NYSE. It was the second-biggest advancer in the S&P 500 and among the Dow's biggest gainers.

Microsoft's deal, for about $6 billion in cash, drove aQuantive's stock up 77.8 percent to $63.79. The Nasdaq's biggest percentage gainer was aQuantive. But Microsoft's shares dipped 0.5 percent to $30.83.

Intuit Inc. was the top-weighted gainer in the Nasdaq 100 . The stock rose 13.9 percent to $31.56, a day after the maker of TurboTax tax-preparation software announced plans to buy back up to $800 million of its stock and reported quarterly profit that beat estimates.

The Reuters/University of Michigan Surveys of Consumers preliminary May consumer sentiment index reading, released just after the opening, rose to 88.7 from 87.1 at the end of April, beating the 86.5 median forecast of analysts polled by Reuters.

Volume was active on the NYSE, where about 1.65 billion shares changed hands, slightly exceeding last year's estimated daily average of 1.64 billion. On the Nasdaq, about 2.07 billion shares were traded, exceeding last year's daily average of 2.02 billion.

Advancers outnumbered decliners by a ratio of about 2 to 1 on both the Big Board and the Nasdaq.

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