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U.S. stocks higher as investors focus on possible Ford, Toyota alliance

U.S. stocks higher as investors focus on possible Ford, Toyota alliance

Wall Street extended its advance into a second session Wednesday as bargain hunters picked up stocks across a variety of sectors in the final stretch of the year.
The auto industry was in focus after a meeting between executives at Toyota Motor Corp. and Ford Motor Co. sparked hope about a potential alliance between the two rivals. Shares of both companies moved sharply higher in the first hour of trading.
Further takeover activity also lent support to the overall market after McClatchy Co. announced late Tuesday it agreed to sell the Star Tribune newspaper in Minneapolis to a private equity fund. Also, graphics communication company Cenveo Inc. agreed to buy rival Cadmus Communications Corp.
The session was again marked by thin volume typical of the week between Christmas and New Year's. The New York Stock Exchange began the session with two minutes of silence as a tribute to President Gerald Ford, while the Nasdaq Stock Market had a similar observance later in the morning.
"What you're seeing is window dressing, people want to finish up the year looking like they own the best names," said Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher. "And for those that missed the market, they're trying to put their cash to work and play catch-up. You've got momentum on your side this year."
In midday trading, the Dow Jones industrial average rose 75.94, or 0.61 percent, to 12,483.57. The index is now trading just above its record close reached earlier this month.
Broader stock indicators also advanced. The Standard & Poor's 500 index was up 6.78, or 0.48 percent, at 1,423.68, and the Nasdaq composite index rose 13.55, or 0.56 percent, to 2,427.06.
The two-day advance leaves major indexes heading toward double-digit gains for the year. The Dow is now up 16.5 percent this year, while the Nasdaq has risen almost 10 percent and the S&P 500 up 13.9 percent.
Bonds were weaker, with the yield on the benchmark 10-year Treasury note rising to 4.65 percent from 4.60 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices were higher.
Oil and natural gas prices continued to tumble amid mild winter weather that depressed demand for heating fuel. The price of a barrel of light sweet crude fell 20 cents to $60.90 on the New York Mercantile Exchange.
Although lower gasoline prices could be a boost to consumer spending, that still wasn't enough to rally retailers. Shares of the biggest U.S. retail chains were mixed after a report from the International Council of Shopping Centers confirmed sales were not as strong in the pre-Christmas holiday shopping period.
Wal-Mart Stores Inc., the world's largest retailer, rose 8 cents to $46.17. Federated Department Stores Inc. rose 51 cents to $38.28, while Target Corp. fell 12 cents to $56.97.
However, homebuilders advanced after a Commerce Department report showed new-home sales rose more than expected in November. The data also indicated that inventories fell and the median price of a new home moved higher.
The government report gave hope the serious slump in housing could be ending. Shares of Hovnanian Enterprises Inc. rose 53 cents to $33.77, Toll Brothers Inc. added 70 cents to $32.39, and KB Home was up 92 cents at $51.71.
Ford rose 5 cents to $7.54 on speculation the struggling automobile maker might be in talks about a possible alliance with Japanese rival Toyota. Shares of Toyota spiked $1.61 to $133.22.
Investors also were tracking the slide of Apple Computer Inc. after a legal publication reported that federal prosecutors are probing whether former company executives forged documents to maximize executives' stock option profits. Shares fell $1.76, or 2.2 percent, to $79.73.
McClatchy, the second-largest U.S. newspaper publisher, said it will sell the Star Tribune to Avista Capital Partners for $530 million. The sale follows a decision earlier this year to spend $4.5 billion to buy the Knight Ridder newspaper chain.
Shares of McClatchy fell 43 cents to $42.64.
Cadmus Communications soared $3.49, or 16.6 percent, to $24.47 after it agreed to be acquired by Cenveo for about $235.1 million. Both companies will form the third-largest graphic services provider in North America. Cenveo rose $1.29, or 6.5 percent, to $21.14.


Updated : 2021-02-28 17:57 GMT+08:00