Stocks close higher as Dow passes 13,300
NEW YORK » Wall Street closed mostly higher yesterday, though technology stocks struggled to hold onto gains during the session, as a $27 billion bid by Alcoa Inc. for Canadian aluminum rival Alcan Inc. buoyed blue chip issues. The Dow Jones industrials passed 13,300 for the first time and had yet another record close.
The move by Alcoa, one of the 30 stocks that make up the Dow, gave much of the market a lift yesterday as investors often regard merger and acquisition activity as a bullish bet by companies on corporate profit. A pullback in Yahoo Inc. depressed tech shares.
With little earnings and economic data to go on, investors were waiting for further signals to try to determine where stocks might be headed and whether Wall Street's record rally will continue. They were also awaiting the Federal Reserve's decision tomorrow on interest rates.
Yesterday afternoon, the Fed reported that consumers boosted their borrowing in March at the fastest pace in four months. The report showed that consumer credit increased at a brisk annual rate of 6.7 percent in March.
"We're kind of waiting for macroeconomic news to shape the outlook for the rest of the year," said Les Satlow, portfolio manager at Cabot Money Management. "I do believe the market will spend some time here trying to catch its breath or even pull back a bit. We need more macroeconomic clarity as to second half of 2007 and the direction the Fed."
The Dow industrials rose 48.35, or 0.36 percent, to 13,312.97. The Dow rose as high as 13,317.69 yesterday, topping a previous trading high of 13,284.53 set Friday.
Broader stock indicators rose. The Standard & Poor's 500 index rose 3.86, or 0.26 percent, to 1,509.48. Last week, the S&P 500 moved above the 1,500 level for the first time in nearly seven years. The 1,500 level puts the closing high of 1,527.46 reached in March 24, 2000, within investors' sights.
The Nasdaq composite index fell 1.20, or 0.05 percent, to 2,570.95.
The Russell 2000 index of smaller companies slipped 1.01, or 0.12 percent, to 831.87.
Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, where consolidated volume came to 2.45 billion shares, down from 2.73 billion on Friday.
Bonds were little changed after an auction of $14 billion of 3-year notes. The yield on the benchmark 10-year Treasury note remained flat at 4.64 percent from late Friday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude fell 41 cents to $61.52 per barrel on the New York Mercantile Exchange.
Stocks have moved higher in recent weeks on better-than-expected earnings results, and investors might be casting about for the next catalyst to drive stocks.
In corporate news, Alcoa offered $58.60 in cash and 0.4108 of a share for each share of Alcan. Based on the closing prices Friday, Alcoa's offer carries a 20-percent premium. Alcoa said it took its offer to shareholders after Alcan rejected the company's overtures for two years. Alcoa rose $2.97, or 8.3 percent, to $38.63, while Alcan surged $21.08, or 34.5 percent, to $82.11.