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Stocks edge higher after drifting in early trade

Published on NewsOK Modified: May 19, 2014 at 3:55 pm •  Published: May 19, 2014
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Stocks finished slightly higher on Monday, adding to the small gains the market carved out at the end of last week.

A dearth of fresh economic data had many investors focusing on headline-grabbing corporate deals, including a $48.5 billion bid by AT&T to acquire satellite TV provider DirecTV and a joint venture between Johnson Controls and a Chinese company that will form the world's largest maker of automotive interiors.

The latest batch of deals is a good sign for the market and further illustrates that many companies have the financial ammunition and appetite to grow through acquisitions.

Even so, much of the market remained in drift mode Monday, but still near the latest all-time high set by the Standard & Poor's 500 index a week ago.

"We're seeing big deals — this AT&T deal is big," said Marc Doss, regional chief investment officer for Wells Fargo Private Bank. "But it's not enough to drive us dramatically higher in the short run."

The three major indexes were down in premarket trading as investors reacted to the AT&T-DirecTV deal, which was announced late Sunday. The proposed deal would create the second-largest pay TV operator behind a combined Comcast-Time Warner Cable. But such a combination could face close scrutiny from the Federal Communications Commission and Department of Justice.

When regular trading began, the S&P 500 and Nasdaq composite drifted into positive territory, while the Dow Jones industrial average lagged.

AT&T and DirecTV opened lower and never recovered. AT&T ended down 36 cents, or 1 percent, at $36.38. DirecTV fell $1.53, or 1.8 percent, to $84.65.

Word that AstraZeneca rejected rival drugmaker Pfizer's latest takeover offer helped boost Pfizer's shares 16 cents, or 0.5 percent, to $29.28.

Pfizer has been courting AstraZeneca since January. It announced Sunday that it was ready to raise its stock-and-cash offer by 15 percent to $118.8 billion.

By midmorning, major U.S. indexes had each captured small gains that would hold the rest of the day.

The S&P 500 index gained 7.22 points, or 0.4 percent, to close at 1,885.08.

The Dow Jones industrial average added 20.55 points, or 0.1 percent, to end at 16,511.86.

The Nasdaq composite index rose 35.23 points, or 0.9 percent, to finish at 4,125.82.

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