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Cingular deal sends
stocks up sharplyThe aggressive bid for
AT&T Wireless sparks optimism
NEW YORK >> Investors sent stocks sharply higher yesterday as Cingular's $41 billion bid for AT&T Wireless set an upbeat tone on Wall Street, and Disney rejected a hostile takeover proposal from Comcast but said it would consider other offers that fairly valued the company.
There was also encouraging economic news from the Federal Reserve, which reported a rebound in production at the nation's factories, mines and utilities last month. The 0.8 percent rise in industrial production matched forecasts and was welcome following a flat reading in December.
The fairly aggressive bid for AT&T Wireless Services Inc., which many thought would sell for about $30 billion, sparked a good deal of optimism on the first trading day of a holiday-shortened week. Some hoped the deal would inspire more spending in the telecommunications sector.
"Seeing corporations pay a premium like this for companies could lead some investors to think maybe the market's still a bit undervalued, so we're seeing shares drift higher," said Todd Clark, head of listed equity trading at Wells Fargo Securities.
The Dow Jones industrial average surged 87.03, or 0.8 percent, to close at 10,714.88, after a gain of 0.3 percent last week.
The broader market gauges also moved higher. The Nasdaq composite index sprinted 26.79, or 1.3 percent, to 2,080.35, after falling 0.5 percent last week. The Standard & Poor's 500 index closed up 11.18, or 1.0 percent, at 1,156.99, following an advance of 0.3 percent.
AT&T Wireless soared $1.96, or 16.6 percent, to $13.78, after accepting a $41 billion cash offer from Cingular Wireless, a merger that would create the nation's largest mobile phone company. Cingular's joint owners posted losses; majority stakeholder SBC Communications Inc. declined 18 cents to $24.87, and BellSouth Corp. fell 49 cents to $29.06.
Dow component Walt Disney Co. lost 2 cents to $26.90 a day after the entertainment conglomerate's board refused Comcast Corp.'s unsolicited $54 billion offer, saying it was too low. But the board said it would consider other legitimate proposals that would create shareholder value. Comcast, which stood by its bid, gained 85 cents to $30.75 after several sessions of declines.
GreenPoint Financial Corp. shed $1.58 to $45.25 on news that it would be acquired by North Fork Bancorp Inc. in a $6.3 billion all-stock deal, creating the nation's 16th-largest bank. North Fork shares fell 38 cents to $43.37.
Further underscoring the ongoing consolidation in the banking sector, Provident Financial Group shot up $3.87, or 11.1 percent, to $38.70 after National City Corp. agreed to acquire it for $2.1 billion in stock. The combined entity would be Ohio's largest bank. National City closed down 83 cents at $34.56.
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