M&A, Earnings Boost Stocks Despite Rising Oil

FOX Business: The Power to Prosper

The markets traded higher amid optimism over corporate earnings and continued merger activity even as oil hit a 2-1/2 year high.

Today's Markets

The Dow Jones Industrial Average was up 32.9 points, or 0.27%, to 12,427, the S&P 500 increased 2.9 points, or 0.22%, to 1,336 and the Nasdaq Composite gained 8.6 points, or 0.22%, to 2,800. The FOX 50 climbed 3.4 points to 938.

Financial shares such as Citigroup (NYSE:C) and Bank of America (NYSE:BAC) led the rally.  Energy players including Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL) lagged behind.

Optimistic corporate earnings have helped instill confidence in the markets.  Indeed, agriculture giant Monsanto (NYSE:MON) saw its fiscal second-quarter earnings jump 15% on strong seed sales and widening profits margins.

The pace of merger and acquisition activity has heightened in recent weeks.  Dish Network (NASDAQ:DISH) announced plans to buy Blockbuster out of bankruptcy for $320 million on Wednesday. Laboratory Corp of America Holdings (NYSE:LH) also agreed to purchase Orchid Cellmark (NASDAQ:ORCH), a provider of DNA testing services, for $85 million in cash.

Oil prices hit the highest levels since September 2008. The Organization of Petroleum Exporting Countries said it can do little to quell spiking oil prices, blaming speculators that are betting on the "worst case scenario" and not trading based on supply and demand.

Light, sweet crude traded higher by 49 cents, or 0.45%, to $108.83 a barrel.  The price of a gallon of regular gas at the pump averaged $3.71 nationwide, up from $3.51 last month and $2.83 last year.

Crude inventories jumped by 2 million to 357.7 million barrels in the prior week, higher than Wall Street's expectation of a build of 1.6 million barrels.  Oil prices climbing by more than 22 million barrels since the beginning of the year have done little to sway volatile markets.

Oil generally trades inversely to the dollar, which is down 0.53% on the day against world currencies, adding to positive pressure on prices.

Federal Reserve officials are growing increasingly confident in the the U.S. economic expansion, according to minutes from the March FOMC meeting released Tuesday.

The Federal Reserve "saw incoming data as consistent with a recovery that was gaining traction and ongoing gradual improvement in labor market conditions," wrote Barclays Capital economist Michael Gaspen, in a research note.

However, central bank officials differed on how soon to put the brakes on the highly accommodative monetary policy course, the minute revealed.

The euro jumped 0.77% against the U.S. dollar. In metals, gold climbed $6.00, or 0.41%, to $1,459 after soaring nearly $20 on Tuesday.

Corporate News 

Google (NASDAQ:GOOG) is planning on redesigning its YouTube video service around channels, according to a report by The Wall Street Journal, citing sources.

Pfizer (NYSE:PFE) is collaborating with Zacharon Pharmaceuticals on a drug to treat a genetic condition called lysosomal storage disorders, which can lead to mental retardation and early death.  The deal could be worth as much as $210 million.

Honda (NYSE:HMC) will halve its output in the U.K. due to part shortages.

American Superconductor (NASDAQ:AMSC) shares plunged after the maker of wind-turbines sharply cut its fourth-quarter outlook.

Cubist Pharmaceuticals (NASDAQ:CBST) and Optimer Pharmaceuticals (NASDAQ:OPTR) unveiled plans to co-market an antibiotic called Dificid, which fights a deadly and difficult-to-target bacterial infection called Clostridium difficile.

Broadcom (NASDAQ:BRCM) was upgraded from "perform" to "outperform" by analysts at Oppenheimer, boosting shares of the networking-equipment maker.

Toyota (NYSE:TM) sold its one millionth Prius hybrid in the U.S.

Foreign Markets

European markets were largely in the green Wednesday.  The English FTSE 100 was up 0.61% to 6,044, the French CAC 40 climbed 0.17% to 4,049 and the German DAX jumped 0.6% to 7,218.

In Asia, the Nikkei 225 slipped 0.32% to 9,584 on lingering concerns over the country's ability to recover from the damage caused by the devastating earthquake and tsunami. The Chinese Hang Seng was up 0.56% to 24,285.