Stocks rise after strong earnings, deal news
NEW YORK – Strong earnings results and another round of corporate deals pushed stocks higher Wednesday. The Standard & Poor's 500 index has now doubled from its intraday low set in the financial crisis.
Family Dollar Stores Inc. rose 21 percent to $53.25 after investor Nelson Peltz's firm offered to pay up to $60 a share to take the discount retailer private. That was a 36 percent premium from Tuesday's closing price. Family Dollar rose the most of any stock in the Standard & Poor's 500 index.
Genzyme Corp. rose 1.1 percent after French drug maker Sanofi-Aventis agreed to buy the U.S. biotechnology firm for $20 billion in cash. The deal ended months of haggling between the two companies.
Dell Inc. rose 12 percent a day after the personal computer maker raised its full-year revenue forecast, a sign that businesses are spending more on technology.
Abercrombie & Fitch Co. rose 7.6 percent after the teen clothing maker said its fourth-quarter net income nearly doubled on strong sales overseas and better U.S. results.
Comcast Corp. also reported earnings that surpassed analysts' expectations. Its stock rose 4 percent after more customers signed up for a combination of TV, high-speed Internet access and digital phone services.
Deere & Co. rose 2.4 percent after the equipment maker said its net income more than doubled, thanks to growing sales of large farm machinery in the U.S. and Canada.
The Dow Jones industrial average rose 61.53, or 0.5 percent, to close at 12,288.17, its highest close since June 13, 2008.
The S&P 500 rose 8.31, or 0.6 percent, to 1,336.32. That was double its intraday low of 666.79 reached on March 6, 2009 at the height of the financial crisis.
The Nasdaq composite index rose 21.21, or 0.8 percent, to 2,825.56
The yield on the 10-year Treasury note rose to 3.63 percent from 3.61 percent from late Tuesday.
The Commerce Department reported that new home construction rose in January by the largest amount in 20 months. The pace of construction is still way off from levels seen in a healthy economy, but analysts were optimistic about the report.
"Housing is slowly showing some signs of life here," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
The Labor Department also reported that wholesale prices rose sharply in January due to higher costs for gas and other goods.
Oil prices rose after Israel's foreign minister said Iran will send two warships through the Suez Canal on the way to Syria. Benchmark oil for March delivery rose 67 cents to settle at $84.99 per barrel.
The Federal Reserve reported separately that for the fifth straight month factories produced more goods in January, although overall industrial production fell. The Fed also released minutes from its policy meeting last month showing that Fed officials unanimously concluded that inflation wasn't yet a problem. They also raised their forecast for economic growth this year.
Three stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume was 4 billion shares.