Merger and acquisition activities and a rally in small-cap stocks propelled benchmarks to record highs on Monday. New deals between Analog Devices and Hittite, Hillshire Brands and Tyson Foods, and Merck and Idenix lifted investor sentiment. Meanwhile, news that Carl Icahn has a 9.4% stake in Family Dollar was also a catalyst. The S&P 500 ended at another high; the nineteenth one this year. The blue-chip index closed at a record level for the ninth time this year.
For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) gained 0.1% to close Monday's trading session at 16,943.10. The Standard & Poor 500 (S&P 500) went up almost 0.1% to finish at 1,951.27. The tech-laden Nasdaq Composite Index advanced 0.3% to 4,336.24. The fear-gauge CBOE Volatility Index (VIX) went up 3.9% to settle at 11.15. Total volume on the New York Stock Exchange was 2.8 billion shares. Advancers outpaced declining stocks on the NYSE. For 59% stocks that advanced, 37% declined.
Merger and acquisition activity boosted investor sentiment. Shares of semiconductor company Analog Devices, Inc. ADI jumped 5.0% after the company agreed to acquire Hittite Microwave Corporation HITT for about $2 billion. The chip maker said that it will buy Hittite at $78 per share in cash, a premium of about 29% more than Hittite's closing price of $60.56 on Friday. Shares of Hittite surged 28.6%.
New deals in the consumer goods and the health care sectors also added to the bullish sentiment. Shares of The Hillshire Brands Company HSH surged 5.3% after Tyson Foods, Inc. TSN agreed to buy Hillshire in an all-cash deal valued at $8.55 billion or $63 per share. Shares of Tyson Foods and Pilgrim's Pride plunged 6.5% and 6.7%, respectively.
Tyson Foods had been competing with rival Pilgrim's Pride Corporation PPC to acquire Hillshire Brands. Tyson Foods' offer price of $63 per share came in after Pilgrim's Pride raised its offer to $55 per share on June 3, which values the company at $6.7 billion. On May 29, Tyson Foods had initially offered to buy the maker of Jimmy Dean sausage for $6.8 billion or $50 per share in cash. The offer was more than Pilgrim's Pride offer to buy Hillshire in an all-cash deal valued at $6.4 billion or $45 per share on May 27.
In another development, Merck & Co. Inc. MRK agreed to acquire Idenix Pharmaceuticals Inc. IDIX for $24.50 per share, which values the company at $3.85 billion. The acquisition will give Merck access to Idenix's treatments for hepatitis C. Shares of Idenix Pharmaceuticals more than tripled, gaining a significant 229.1%. Shares of Merck also increased 0.2%.
Separately, gains in small-cap stocks also ensured a positive finish for the benchmarks. The Russell 2000 Index of small-caps went up 0.9% on Monday. The index for small-cap stocks advanced 4.4% in the last four sessions and is now up 1.0% in 2014.
Meanwhile, investors assessed St.Louis Fed President James Bullard and Boston Fed President Eric Rosengren's comments. James Bullard said he believes the economy is moving closer to its two major goals of maximum employment and stable prices. He stated that inflation is now “moving higher”, a significant shift from his earlier comment. Last month, he stated that inflation was stable.
Eric Rosengren, a nonvoting member of the policy committee, stated that a cautious and predictable exit plan is the best way forward in order to evade market concerns over higher interest rates.
Six out of 10 sectors of the S&P 500 ended in the green. The SPDR S&P Homebuilders ETF XHB led the advance among the S&P 500 sectors. The sector gained 1.1%. Key housing stocks from the sector such as DR Horton Inc. DHI, Lennar Corp. LEN, Toll Brothers Inc. TOL, KB Home KBH, Beazer Homes USA Inc. BZH and PulteGroup, Inc. PHM increased 0.8%, 0.4%, 1.1%, 1.1%, 0.7% and 0.5%, respectively.
The Industrial Select Sector SPDR XLI gained 0.5%, the second highest among the S&P 500 sectors. Key stocks from the sector such as General Electric Company GE, United Technologies Corp. UTX, Union Pacific Corporation UNP and 3M Company MMM increased 0.9%, 1.0%, 1.2%, and 0.5%, respectively.
For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) gained 0.1% to close Monday's trading session at 16,943.10. The Standard & Poor 500 (S&P 500) went up almost 0.1% to finish at 1,951.27. The tech-laden Nasdaq Composite Index advanced 0.3% to 4,336.24. The fear-gauge CBOE Volatility Index (VIX) went up 3.9% to settle at 11.15. Total volume on the New York Stock Exchange was 2.8 billion shares. Advancers outpaced declining stocks on the NYSE. For 59% stocks that advanced, 37% declined.
Merger and acquisition activity boosted investor sentiment. Shares of semiconductor company Analog Devices, Inc. ADI jumped 5.0% after the company agreed to acquire Hittite Microwave Corporation HITT for about $2 billion. The chip maker said that it will buy Hittite at $78 per share in cash, a premium of about 29% more than Hittite's closing price of $60.56 on Friday. Shares of Hittite surged 28.6%.
New deals in the consumer goods and the health care sectors also added to the bullish sentiment. Shares of The Hillshire Brands Company HSH surged 5.3% after Tyson Foods, Inc. TSN agreed to buy Hillshire in an all-cash deal valued at $8.55 billion or $63 per share. Shares of Tyson Foods and Pilgrim's Pride plunged 6.5% and 6.7%, respectively.
Tyson Foods had been competing with rival Pilgrim's Pride Corporation PPC to acquire Hillshire Brands. Tyson Foods' offer price of $63 per share came in after Pilgrim's Pride raised its offer to $55 per share on June 3, which values the company at $6.7 billion. On May 29, Tyson Foods had initially offered to buy the maker of Jimmy Dean sausage for $6.8 billion or $50 per share in cash. The offer was more than Pilgrim's Pride offer to buy Hillshire in an all-cash deal valued at $6.4 billion or $45 per share on May 27.
In another development, Merck & Co. Inc. MRK agreed to acquire Idenix Pharmaceuticals Inc. IDIX for $24.50 per share, which values the company at $3.85 billion. The acquisition will give Merck access to Idenix's treatments for hepatitis C. Shares of Idenix Pharmaceuticals more than tripled, gaining a significant 229.1%. Shares of Merck also increased 0.2%.
Separately, gains in small-cap stocks also ensured a positive finish for the benchmarks. The Russell 2000 Index of small-caps went up 0.9% on Monday. The index for small-cap stocks advanced 4.4% in the last four sessions and is now up 1.0% in 2014.
Meanwhile, investors assessed St.Louis Fed President James Bullard and Boston Fed President Eric Rosengren's comments. James Bullard said he believes the economy is moving closer to its two major goals of maximum employment and stable prices. He stated that inflation is now “moving higher”, a significant shift from his earlier comment. Last month, he stated that inflation was stable.
Eric Rosengren, a nonvoting member of the policy committee, stated that a cautious and predictable exit plan is the best way forward in order to evade market concerns over higher interest rates.
Six out of 10 sectors of the S&P 500 ended in the green. The SPDR S&P Homebuilders ETF XHB led the advance among the S&P 500 sectors. The sector gained 1.1%. Key housing stocks from the sector such as DR Horton Inc. DHI, Lennar Corp. LEN, Toll Brothers Inc. TOL, KB Home KBH, Beazer Homes USA Inc. BZH and PulteGroup, Inc. PHM increased 0.8%, 0.4%, 1.1%, 1.1%, 0.7% and 0.5%, respectively.
The Industrial Select Sector SPDR XLI gained 0.5%, the second highest among the S&P 500 sectors. Key stocks from the sector such as General Electric Company GE, United Technologies Corp. UTX, Union Pacific Corporation UNP and 3M Company MMM increased 0.9%, 1.0%, 1.2%, and 0.5%, respectively.
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ANALOG DEVICES ADI: Free Stock Analysis Report
HITTITE MICROWV HITT: Free Stock Analysis Report
HILLSHIRE BRAND HSH: Free Stock Analysis Report
TYSON FOODS A TSN: Free Stock Analysis Report
PILGRIMS PRIDE PPC: Free Stock Analysis Report
MERCK & CO INC MRK: Free Stock Analysis Report
IDENIX PHARMA IDIX: Free Stock Analysis Report
D R HORTON INC DHI: Free Stock Analysis Report
LENNAR CORP -A LEN: Free Stock Analysis Report
TOLL BROTHERS TOL: Free Stock Analysis Report
KB HOME KBH: Free Stock Analysis Report
BEAZER HOMES BZH: Free Stock Analysis Report
PULTE GROUP ONC PHM: Free Stock Analysis Report
GENL ELECTRIC GE: Free Stock Analysis Report
UTD TECHS CORP UTX: Free Stock Analysis Report
UNION PAC CORP UNP: Free Stock Analysis Report
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