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Overnight Markets: Wall Street jumps on M&A deals
by Himanshu Singh on Feb 20, 2013 at 04:35
Wall Street climbed on Tuesday, with the benchmark indexes scaling their highest levels in five years, amid increasing optimism over dealmaking and a report showing increasing investor confidence in Germany.
The Dow Jones industrial average gained 54 points, or 0.39%, to 14,036. The Standard & Poor's 500 Index gained 11 points, or 0.73%, to 1,531. The Nasdaq Composite Index gained 22 points, or 0.68%, to 3,214.
Office Depot Inc jumped 9.4% after sources said the No. 2 U.S. office supply retailer was in advanced talks to merge with smaller rival OfficeMax Inc, which surged more than 20%.
Other stocks in the office supplies sector also gained. Larger rival Staples Inc shot up 13.1% as the best performer on the S&P 500.
Economic data showed the NAHB/Wells Fargo Housing Market index unexpectedly fell to 46 in February from 47 in the prior month as builders faced higher material costs.
In Germany, investor confidence jumped more than economists forecast in February to the highest in almost three years, data showed yesterday, adding to signs that Europe’s largest economy is recovering.
On the negative side, health insurance stocks plunged, led by a 6.4% decline in Humana Inc. The company said the government's proposed 2014 payment rates for Medicare Advantage participants were lower than expected and would hurt its profit outlook. UnitedHealth Group fell 1.2%.
In earnings news, Express Scripts gained 2.5% after the pharmacy benefits manager posted fourth-quarter earnings.
Google jumped 1.8%, surpassing $800 for the first time, after benefiting as more advertisers place promotions on its website.
In the financial sector, Bank of America rose 1.3%, Citigroup jumped 1.5%, while JP Morgan Chase added 1.2%.
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