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U.S. stocks rise after the open on M&A activity; Dow up 0.6%

Published 03/07/2011, 10:02 AM
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Investing.com – U.S. stock markets were higher after the open on Monday, as increased merger and acquisition activity overshadowed concerns over rising oil prices.

During early U.S. trade, the Dow Jones Industrial Average climbed 0.6%, the S&P 500 index rose 0.42%, while the Nasdaq Composite index was up 0.18%. 

Earlier in the day, U.S. crude oil prices spiked past USD106 a barrel, while Brent oil surged above USD118, fuelling concerns over the global economic recovery.  

Meanwhile, shares of the world’s second largest computer hard drive manufacturer Western Digital soared 17.3% after it said it would purchase Hitachi Global Storage Technologies, a unit of Hitachi, in a deal valued at approximately USD4.3 billion. Hitachi, which would own a 10% stake in Western Digital after the deal closes, rallied 5.2% in early trade.

Shares in rival Seagate Technology, which Western Digital attempted to acquire in December 2010, jumped 13.4%.

The operator of the Nasdaq Stock Exchange, Nasdaq OMX Group saw shares climb 1.4% amid speculation the London Stock Exchange would announce a takeover bid for the bourse operator.

Also Monday, radiation-treatment firm TomoTherapy rallied 26.1% after it agreed to be acquired by bigger rival Accuray for approximately USD277 million. Shares of Accuray were down 6.5% following the news. 

The world’s largest coffeehouse chain Starbucks saw shares gain 3.9% after Morgan Stanley upgraded the stock to ‘overweight’.

In earnings news, shares of network service provider Ciena Corporation dropped 5.5% after it reported a first quarter loss of USD79.1 million, compared to a loss of USD53.3 million a year earlier. The company said it expects second quarter revenue of USD415 million to USD435 million, below market expectations of USD439 million.  

Across the Atlantic, European stock markets were broadly higher. The EURO STOXX 50 climbed 0.95%, France’s CAC 40 added 0.7%, Germany's DAX rallied 1.14%, while Britain's FTSE 100 gained 0.79.

Later in the day, the U.S. was to publish official data on consumer credit.


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