Stocks inch higher after round of corporate deals
By Steven Bernard
Stocks got a modest lift Monday from a fresh round of corporate dealmaking as investors await the start of earnings season. The Dow Jones industrial average rose about 2 points. The small gain comes after the Dow posted its best week since July 2009.
Major indexes rose modestly in early trading after insurance broker Aon Corp. said it will buy human resources company Hewitt Associates for $4.9 billion in cash and stock. Acquisitions are often taken as a positive sign that companies are more confident about their future business and willing to spend cash being held in reserve.
Meanwhile, Playboy Enterprises Inc. founder Hugh Hefner is offering to buy the remaining outstanding stock of the company to take it private in a deal that values the media company at $185 million.
And beauty products seller Avon Products Inc. agreed to buy Silpada Designs for at least $650 million as it tries to expand its jewelry business.
The small gains come as investors prepare for the start of earnings season. Until last week, stocks had been sliding on signs that the economy is not growing nearly as fast as economists and investors had hoped. Earnings over the next few weeks will provide insight into whether sluggish retail sales, waning consumer confidence and high unemployment have actually hurt businesses’ profits.
In morning trading, the Dow Jones industrial average rose 1.81, or less than 0.1 percent, to 10,201.36. The Standard & Poor’s 500 index rose 0.58, or 0.1 percent, to 1,078.54, while the Nasdaq composite index rose 12.72, or 0.6 percent, to 2,209.17.
Even with the surge, the Dow is still down 9 percent from its high of the year reached in late April.
Washington Post staff
July 12, 2010; 12:17 PM ET
Categories: The Ticker , Wall Street
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