Wall Street Jumps on Flurry of M&A News

Published August 25, 2014

| Dow Jones Newswires

The S&P 500 popped to an intraday record above the milestone level of 2,000 on Monday, as U.S. stocks received a lift from merger news and advances by European markets.

Shares of Burger King Worldwide Inc., Tim Hortons Inc. and InterMune Inc. surged on deal news, while July new-home sales came in slightly below expectations, but the government upwardly revised the June figure.

The S&P 500 (SPX) gained 11 points, or 0.5%, to recently trade at 1,999 after scoring an intraday record above 2,000. The Dow Jones Industrial Average (DJI) climbed 97 points, or 0.6%, to 17,098, while the Nasdaq Composite (RIXF) advanced by 26 points, or 0.6%, to 4,565.

Stocks finished lower on Friday but achieved a third straight up week, as the S&P 500 pulled back from its record close on Thursday at 1,992.37.

Draghi 'whatever it takes' part 2: Inspiration for Monday's gains came in part from stronger European markets, where the Stoxx Europe 600 gained on hints of more stimulus from European Central Bank President Mario Draghi. (Read more: ECB's Draghi softens emphasis on austerity http://www.marketwatch.com/story/draghi-ecb-cant-solve-unemployment-by-itself-2014-08-22.)

Draghi's comments, which came after European markets had closed, and a speech by Federal Reserve Chairwoman Janet Yellen were brushed aside by Wall Street on Friday. Yellen stayed largely cagey about the timing of the next rate hike in the U.S.

"[Draghi] was dovish and, to a certain degree, while Yellen and the rest of the Fed members are preparing for a rate hike next year, the tone is still that of easy money and so if you have a flow of easy money coming out of Europe, that is going to help equity markets here in the States as well," said Peter Cardillo, chief market economist at Rockwell Global Capital.

Stocks to watch: Shares of Burger King Worldwide Inc.(BKW) jumped 15% after the company said it is in talks to buy Canadian coffee-and-doughnut chain Tim Hortons Inc. (THI). The deal would be set up as a so-called tax inversion, moving Burger King's tax base to Canada. U.S.-listed shares of Tim Hortons rose 20%. (Read more about Monday's biggest-moving stocks http://www.marketwatch.com/story/apple-goldman-are-stocks-to-watch-on-monday-2014-08-24.).

Shares of InterMune Inc. (ITMN) soared 36% after Switzerland-based Roche Holding AG (RHHBY) said Sunday it will pay $8.3 billion for the California biotech firm.

Shares of Ann Inc.(ANN) rose 6% after activist investor Engine Capital LP called on the parent of clothing retailer Ann Taylor to sell itself.

Other markets: Monday is a holiday in the U.K. In Asia, the Nikkei 225 index rose. The euro (EURUSD) fell against the dollar on the suggestion of more ECB easing as well as a survey that showed weaker German business confidence.

URL

http://www.foxbusiness.com/markets/2014/08/25/merger-news-helps-lift-us-equity-futures/