After showing a strong upward move in early trading, stocks have continued to perform well over the course of the trading day on Monday. The markets are benefiting from a positive reaction to news on the merger-and-acquisition front as well as easing concerns about the nuclear crisis in Japan.
The major averages have remained rangebound in recent trading, hovering firmly in positive territory. The Dow is currently up 183.42 points or 1.6 percent at 12,041.94, the Nasdaq is up 49.13 points or 1.9 percent at 2,692.80 and the S&P 500 is up 19.62 points or 1.5 percent at 1,298.82.
The strength in the markets is partly due to M&A news, including AT&T's (T) announcement that it has agreed to acquire T-Mobile USA from Deutsche Telekom for $39 billion in cash and stock.
The purchase price will include a cash payment of $25 billion, with the balance to be paid using AT&T common stock, subject to adjustment.
In other news on the M&A front, Charles Schwab (SCHW) announced a deal to acquire online brokerage services provider optionsXpress Holdings, Inc. (OXPS) for about $1 billion.
Under the terms of the deal, optionsXpress shareholders will receive 1.02 shares of Schwab stock for each optionsXpress share. Based on Schwab's closing stock price on Friday, the transaction values each optionsXpress share at $17.91.
The markets have also benefited from easing concerns about the nuclear crisis in Japan, as officials said progress is being made on efforts to restore power and cooling systems at the earthquake-crippled Fukushima nuclear plant.
The news on the economic front was not as encouraging, however, with a report from the National Association of Realtors showing that existing home sales fell by much more than anticipated in February.
NAR said existing home sales fell 9.6 percent to an annual rate of 4.88 million in February from an upwardly revised 5.40 million in January. Economists had expected sales to drop to 5.15 million from the 5.36 million originally reported for the previous month.
Traders are also keeping an eye on the situation in Libya, where coalition forces have launched air strikes against the regime of longtime Libyan leader Moammar Qadhafi.
Dow Components
Most of the Dow components are trading higher in the mid-afternoon, helping to keep the blue chip index firmly in positive territory.
Boeing (BA) is turning in one of the Dow's best performances, with the aerospace giant currently up by 3.2 percent. With the gain, shares of Boeing are moving further off the two-month closing low set last Wednesday.
Shares of Exxon Mobil (XOM) have also shown a strong upward move, benefiting from a significant increase by the price of crude oil. Exxon is currently up by 2.6 percent.
3M (MMM), General Electric (GE), and Microsoft (MSFT) are among the other Dow components that are posting notable gains on the day.
Meanwhile, Pfizer (PFE) and Kraft (KFT) are posting moderate losses, falling by 0.7 percent and 0.6 percent, respectively.
Sector News
Energy stocks continue to turn in some of the market's best performances amid the increase by the price of crude oil, with crude for April delivery rising $1.28 to $103.13 a barrel. The price increase reflects concerns about supplies amid the conflict in Libya.
Significant strength also remains visible among electronic storage stocks, as reflected by the 2.5 percent gain currently being shown by the NYSE Arca Disk Drive Index. The gain is lifting the index further off the four-month closing low it set last Wednesday.
Transportation, gold, and networking stocks are also posting strong gains, moving to the upside along with most of the major sectors. On the other hand, modest weakness has emerged among bank stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Monday, with Hong Kong's Hang Seng Index advancing by 1.7 percent. The Japanese markets remained closed for a national holiday.
The major European markets also saw significant strength on the day. The U.K.'s FTSE 100 Index advanced by 1.2 percent, while the French CAC 40 Index and the German DAX Index rose by 2.5 percent and 2.3 percent, respectively.
In the bond markets, treasuries have moved off their worst levels but remain in the red. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is currently up by 4.4 basis points at 3.321 percent.
by RTTNews Staff Writer
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