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Dow gains 138
Associated PressNEW YORK - Philip Morris drove the Dow Jones industrial average to its biggest gain in more than three weeks today as investors applauded the company's plan to acquire the snack food business Nabisco Holdings Corp.
The deal, one of several mergers the market reacted to today, boosted investors' enthusiasm and helped many take their focus off the Federal Reserve's meeting this week.
The Dow average rose 138.24 to close at 10,542.99, its largest point gain since June 2. The Standard & Poor's 500 index was up 13.77 at 1,455.25, and the Nasdaq composite index was up 66.78 at 3,912.12.
Advancers beat decliners by a 5-to-4 margin, with 1,482 up, 1,341 down and 529 unchanged, on the New York Stock Exchange, where volume of 890.07 million shares vs. 849.38 million Friday.
The NYSE composite index gained 3.98 to 643.94; the American Stock Exchange composite index rose 1.42 to 934.83; and the Russell 2000 index of smaller companies climbed 5.95 to 516.36. The 30-year Treasury bond's price rose 28/32, or $8.75 per $1,000 face amount; its yield fell 6 basis points to 5.98 percent. The 10-year note rose 19/32 point as its yield dropped 8 points to 6.1 percent.
The Philip Morris-Nabisco merger, which comes amid a flurry of consolidation in the food industry, also boosted the broader market, said Alan Ackerman, senior vice president at Fahnestock & Co. "It energizes the market," he said. "And it gets massive amounts of cash flowing through it."
Trading was fairly light as investors looked ahead to the Fed's impending decision on interest rates, to be announced on Wednesday. Most economists believe the Fed will leave rates unchanged, sensing that six rate increases in the past year are successfully slowing the economy to a more sustainable pace.