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Stocks rise on dealmaking, easing Japan worries

Stocks rise on dealmaking, easing Japan worries

Stocks jumped in morning trading Monday on corporate dealmaking and easing worries about Japan's nuclear crisis.
AT&T Inc. said it would buy rival T-Mobile USA for $39 billion, creating the largest U.S. cellphone company, and Charles Schwab Corp. said it would buy online brokerage services provider OptionsXpress for $1 billion. The deals raised hopes that more corporate buyouts could be on the way as businesses become more confident in the economic recovery.
"You only expand when you have a good feeling about the future," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners.
The Dow Jones industrial average is up 187 points, or 1.6 percent, to 12,046 in morning trading.
The violence in Libya and Japan's earthquake have led to many large swings in the Dow since late February. The Dow rose or fell by 100 points or more during three days last week. Seven of the 14 trading days since the start of March have had swings that large.
The Standard & Poor's 500 index is up 20, or 1.6 percent, to 1,298. The Nasdaq composite is up 51, or 1.9 percent, to 2,694.
Citigroup Inc. rose 0.9 percent to $4.51 after the bank said it will resume paying a dividend and do a 1-for-10 reverse stock split. Many mutual funds have been barred from buying Citi's stock because it has been trading below $5 per share.
Several other large banks including JPMorgan Chase & Co. and Wells Fargo & Co. announced dividend increases last week after receiving permission to do so from the Federal Reserve. Shareholders have been clamoring for banks to increase their dividends, which were cut during the financial crisis.
Luxury retailer Tiffany warned that Japan's March 11 earthquake could hurt its earnings. Tiffany, which does 18 percent of its business in Japan, cited store closings and limited hours because of the earthquake and tsunami. The jeweler also reported higher-than-expected earnings, sending its stock up 6 percent to $60.85.
Worries about Japan's stricken nuclear reactors were easing. The Nuclear Regulatory Commission said the situation at the Fukushima Dai-ichi plant appeared to be stabilizing and that containment at three of the plant's six reactors was intact.
The gains in stocks came even as oil prices rose back above $103 per barrel. Libyan leader Moammar Gadhafi vowed a "long war" as allied strikes continued in the OPEC nation. Crude prices have been volatile in recent weeks on worries that violence across North Africa and the Middle East could disrupt supplies.


Updated : 2020-12-02 18:14 GMT+08:00