Stocks edge higher after Sysco acquisition
NEW YORK (AP) -- A big acquisition in the food industry and hopes for a longer-term budget deal out of Washington nudged stocks back into record territory Monday afternoon.
Food distributor Sysco rose the most in the Standard & Poor's 500 index after it announced an agreement to buy rival US Foods in an $8.2 billion deal. Sysco's stock jumped $4.27, or 12 percent, to $38.59.
Stocks extended a rally from Friday that was driven by a report of solid U.S. job gains. That boosted investor confidence that the economy was growing strongly enough to handle any pullback in the Federal Reserve's economic stimulus.
"We're just continuing the bullishness that we've had," said Rex Macey, Chief Investment Officer of Wilmington Trust Investment Advisors, a unit of Wilmington Trust Bank.
The S&P 500 index climbed five points, or 0.3 percent, to 1,810 as of 2:12 p.m. Eastern time. That put the index above its record close of 1,807.23 of November 27.
Other indexes also rose. The Dow Jones industrial average was up 28 points, or 0.1 percent, to 16,048. The Nasdaq composite advanced eight points, or 0.2 percent, to 4,071.
Stocks may also have been supported by reports that U.S. lawmakers were moving closer to reaching a longer-term budget deal, said Bill Stone, chief investment strategist at PNC Wealth Management Group.
Dick Durbin, the No. 2 Democrat in the Senate, said Sunday on ABC that budget negotiations are making progress and moving in the right direction.
The stock market stuttered in October after political wrangling over the budget caused a 16-day partial government shutdown that crimped economic growth and hurt consumer confidence.
A budget deal "could be viewed as positive, in the sense that it is putting to bed one more possible disruption," said Stone.
In other corporate news, American Airlines rose $1.10, or 4.6 percent, to $25.06 on the company's first day of trading after completing its merger with US Airways.
There were no major economic reports for investors to focus on.
The stock market has climbed to record levels this year as corporations have kept growing their earnings and the Fed has kept up its $85 billion-a-month bond purchasing program. By buying bonds, which move in the opposite direction of yields, the Fed has pushed up bond prices, lowered interest rates, and encouraged investors to buy stocks.
Fed officials will meet next week, though few analysts are predicting that they will make changes to their bond-buying program in a meeting that runs from Dec. 17 to Dec. 18.
Improvements in the labor market since September last year, when the Fed first initiated its most recent round of stimulus, provided the most powerful argument for reducing bond purchases, St. Louis Fed President James Bullard said on Monday. Bullard, a voting member of the Fed's policy committee, was speaking in St. Louis.
In government bond trading, the yield on the 10-year Treasury note fell to 2.85 percent from 2.86 percent Friday.
In commodities trading, the price of oil was little changed at $97.55 a barrel. Gold rose $5.20, or 0.4 percent, to $1,234.20 an ounce.
Among other stocks making big moves:
- Edwards Lifesciences slipped $3.81, or 5.8 percent, to $62.47 after the Wall Street Journal reported that the company forecast lower sales of its Sapien heart valves.
- McDonald's fell $1.04, or 1 percent, to $95.76 after the company said a key sales figure fell last month. Sales at U.S. restaurants open at least a year fell 0.8 percent.