Investors resume their buying spree
NEW YORK » Investors resumed their buying spree on Wall Street yesterday, 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, as big company stocks benefited from the turnaround.
Earlier in the session, stocks wavered on mixed economic data that showed strength in manufacturing but a wilting housing market and weak car sales.
But the caution dissipated after Dow Jones, which publishes The Wall Street Journal, confirmed that it received an unsolicited bid -- subsequently rejected later in the day -- 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 boosted media companies and publishers in particular, but also encouraged buying in other sectors, too, as it reaffirmed the ongoing trend of surging takeover activity in corporate America despite an economic slowdown.
The Dow industrials rose 73.23, or 0.56 percent, to 13,136.14, after dropping to 13,041.30 in earlier trading.
Broader stock indicators also pared early losses and turned higher. The Standard & Poor's 500 index rose 3.93, or 0.27 percent, to 1,486.30, and the Nasdaq composite index rose 6.44, or 0.26 percent, to 2,531.53.
The Russell 2000 index of smaller companies rose 1.68, or 0.21 percent, at 816.25.
Advancing issues outnumbered decliners by 6 to 5 on the New York Stock Exchange, where consolidated volume came to 3.29 billion shares, up from 2.99 billion Monday.
Crude oil prices fell $1.31 to settle at $64.40 on the New York Mercantile Exchange ahead of the U.S. government's weekly inventory report today.
Bond prices dropped after the manufacturing data made lower rates look less likely, and the yield on the benchmark 10-year Treasury note rose to 4.64 percent, up from 4.62 percent late Monday.
After investors heard Dow Jones was a takeover target, the company's stock surged $19.87, or 54.7 percent, to $56.20. News Corp., which owns the Fox broadcast network among many other media properties, fell $1.01, or 4.2 percent, to $22.99.
Other media stocks rose as well. New York Times Co. rose $1.18, or 5 percent, to $24.58; Journal Register Co. jumped 42 cents, or 7.3 percent, to $6.29; and Reuters Group PLC's U.S. shares climbed $2.19, or 3.8 percent, to $59.43.
Adding to the takeover buzz was a report that Microsoft Corp. is considering buying online advertising company 24/7 Real Media. 24/7 Real Media rose $2.02, or 20 percent, to $11.97, while Microsoft rose 25 cents to $30.19.
Earnings reports were mixed yesterday.
Procter & Gamble Co., a 30 Dow component, said profit in the most recent quarter rose 14 percent, but the figure failed to top expectations. It fell $1.55, or more than 2 percent, to $62.96.
Circuit City Stores Inc. said it expects to report steep first-quarter losses. The electronics retailer dropped 93 cents, or 5.3 percent, to $16.52.