- Title: Merger news, earnings boost stocks
- Date: 24th October 2016
- Summary: NEW YORK, NEW YORK, UNITED STATES (OCTOBER 24, 2016) (REUTERS) (SOUNDBITE) (English) CRFA RESEARCH CHIEF INVESTMENT STRATEGIST, SAM STOVALL SAYING: "Why would AT&T be doing this unless it feels as if there is some growth potential at least expecting that the economy could be improving over the next several quarters?"
- Embargoed: 8th November 2016 20:33
- Keywords: markets stocks CRFA stocks earnings mergers
- Location: NEW YORK, NEW YORK, UNITED STATES
- City: NEW YORK, NEW YORK, UNITED STATES
- Country: USA
- Topics: Economic Events,Equities Markets
- Reuters ID: LVA00255D7VKD
- Aspect Ratio: 16:9
- Story Text:The S&P 500 hit a two-week high on Monday (October 24) on the back of strong earnings, while a flurry of acquisitions indicated corporate America continues to see untapped value in the market.
Annualized third-quarter earnings from S&P 500 components are expected to have risen 1.1 percent last quarter, following four quarters of contraction, according to Thomson Reuters I/B/E/S data. Of the 120 companies that have reported so far, 78 percent have beaten analyst expectations, above the long-term average of 63.5 percent.
Microsoft, which handily beat expectations last week, rose 2.2 percent and Apple, due to report on Tuesday, rose 0.9 percent.
Wall Street signaled skepticism that AT&T would be allowed by regulators to purchase Time Warner Inc for a planned $85.4 billion.
Shares of both companies fell as analysts scrutinized the deal, with AT&T down 1.7 percent at $36.86 and Time Warner Inc down 3.1 percent at $86.74.
But CRFA Research chief investment strategist Sam Stovall said the company was likely optimistic.
"Why would AT&T be doing this unless it feels as if there is some growth potential at least expecting that the economy could be improving over the next several quarters?"
Competitor T-Mobile US jumped to its highest since August 2007 after it raised its forecast for customer additions for the year and said the AT&T-Time Warner deal could help T-Mobile carve out more market share.
T-Mobile shares ended up 9.5 percent at $51.19.
The Dow Jones industrial average rose 77.32 points, or 0.43 percent, to 18,223.03, the S&P 500 gained 10.17 points, or 0.47 percent, to 2,151.33 and the Nasdaq Composite added 52.43 points, or 1 percent, to 5,309.83.
TD Ameritrade fell 4.4 percent to $35.46 after it said it would buy privately held Scottrade Financial Services in a deal valued at $4 billion.
B/E Aerospace jumped 16.4 percent to $58.89 after aircraft component maker Rockwell Collins said it would buy the company in a deal valued at $6.4 billion plus the assumption of $1.9 billion in debt. Rockwell was down 6.2 percent at $79.21.
The S&P 500 posted 18 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 110 new highs and 45 new lows.
About 5.8 billion shares changed hands in U.S. exchanges, below the 6.4 billion daily average over the last 20 sessions.
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