Why Mentor Graphics, Chico's FAS, and U.S. Steel Jumped Today

By Markets Fool.com

Monday was a mixed day for the stock market, with the Dow posting modest gains even as the S&P 500 and Nasdaq Composite fell slightly. Bond prices continued to fall sharply, and some pointed to potential fallout in the housing market as mortgage rates climbed above the 4% level. Yet some stocks nevertheless posted large gains, and Mentor Graphics (NASDAQ: MENT), Chico's FAS (NYSE: CHS), and U.S. Steel (NYSE: X) were among the best performers on the day. Below, we'll look more closely at these stocks to tell you why they did so well.

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Image source: U.S. Steel.

Mentor gets a buyer

Mentor Graphics jumped 18% after conglomerate Siemens agreed to buy out the software company for $4.5 billion. Mentor investors will receive $37.25 per share in cash from Siemens, which sees the acquisition as giving it access to"an established technology leader with a talented employee base that will allow us to supplement our world-class industrial software portfolio," in the words of Siemens CEO Joe Kaeser.

For Mentor, CEO Walden Rhines believes the combination "will better enable us to serve the growing needs of our customers and unlock additional significant opportunities for our employees." With industrial companies seeing increasing needs to automate processes, the Mentor acquisition could start a wave of similar activity throughout the industry.

Chico's looks more fashionable

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Chico's climbed 8% in the wake of receiving an upgrade from analysts at Citigroup. The analyst company raised its rating on the retailer from neutral to buy, arguing that a reduction in tax rates that the new administration could bring in could give shoppers more disposable income, thereby boosting prospects for companies like Chico's that cater toward a more upscale clientele. The retail industry overall has gone through tough times, but Chico's had already seen some promising share-price movement in the wake of the election even before analysts weighed in. The retailer still has a long way to go to earn back all of its share-price declines since 2013, but it has made a big move in the right direction today.

Steel stocks pick up ground

Finally, U.S. Steel gained 8%. Analysts at Morgan Stanley upgraded the entire domestic steel production industry over the weekend, arguing that proposals for increased infrastructure spending as well as greater trade protections against foreign competitors could bring greater prospects for U.S. Steel and its peers to serve the American market. Moreover, some believe that in addition to greater fiscal support from the U.S. government, other key economies like China could also have more favorable policies encouraging construction and infrastructure spending. If that trend continues, then the potential gains could be large enough not just to justify past share-price gains, but also to spur further increases in the future.

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