Stocks higher after Murdoch bid for Dow Jones
EmptyNEW YORK -- Investors resumed their buying spree on Wall Street Tuesday, driving stocks higher after a bid for media company Dow Jones & Co. revived enthusiasm about takeover activity.
The Dow Jones industrial average reached another record close, its 38th since last October.
Earlier in the session, stocks wavered on mixed economic data that showed strength in manufacturing but a wilting housing market and weak car sales. After April's big advance, investors were wary that the current economy wouldn't justify another move higher on Wall Street.
But the caution dissipated after Dow Jones, which publishes The Wall Street Journal, confirmed that it received an unsolicited bid from Rupert Murdoch's News Corp. to buy the company for $5 billion, or $60 a share.
"The market kind of just took off from there," said Todd Leone, managing director of equity trading at Cowen & Co. News of the bid particularly benefited media companies and publishers, but encouraged buying in other sectors, too, as it reaffirmed the ongoing trend of surging takeover activity in corporate America despite an economic slowdown. "It's money pouring into the market," Leone said.
According to preliminary calcuations, the Dow Jones industrial average rose 73.23, or 0.56%, to 13,136.14, after falling as low as 13,041.30 in earlier trading.
Broader stock indicators also turned higher after falling for much of the session. The Standard & Poor's 500 index rose 3.93, or 0.27%, to 1,486.30, and the Nasdaq composite index rose 6.44, or 0.26%, to 2,531.53.
Bond prices dropped after the manufacturing data, and the yield on the benchmark 10-year Treasury note rose to 4.64%, up from 4.62 late Monday.