Tuesday, February 19 15:54:28
U.S. stocks advanced today after the long holiday weekend and a seven-week winning streak for the S and P 500 as merger activity buoyed investor optimism, but health insurer shares muted gains.
Office Depot Inc surged 21.6 percent to $5.58 after a person familiar with the matter said the No. 2 U.S. office supply retailer is in advanced talks to merge with smaller rival OfficeMax Inc. A deal could come as early as this week.
OfficeMax shares jumped 28.8 percent to $13.85 while larger rival Staples Inc shot up 15.1 percent to $14.91 as the best performer on the S and P 500.
"M and A is providing an enormous amount of enthusiasm in pockets and it is really a function of the cost of money, the cost of borrowing. It is a sign there is a shift going on in the economy that is very, very positive," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
"At the same time, if you take the M and A activity out of the picture, you will see that many on the Street are expecting a pullback.
The Dow Jones industrial average rose 59.94 points or 0.43 percent, to 14,041.7, the S and P 500 gained 6.62 points or 0.44 percent, to 1,526.41 and the Nasdaq Composite added 12.01 points or 0.38 percent, to 3,204.04. (C ) Reuters