Wall Street was solidly higher in mid-afternoon trading Monday as a fresh wave of mergers -- real and rumored -- helped investors overcome their jitters about an upcoming congressional appearance by Fedmeister Alan Greenspan.
With most tech and Internet stocks advancing, ETrade Group was out in front amid speculation that the online broker may enter into a partnership with Goldman Sachs -- a move that would lend considerable cachet to both parties in expanding their customer bases.
The Dow Jones Industrial Average gained 156.75 points to 9496.70, and the Nasdaq Composite Index was up 32.24 at 2315.84. The S&P 500 rose 23.24 to 1262.46.
No one had expected this to be such a busy session. Considering that Greenspan is slated to share his thoughts on the US economy with the Senate Banking Committee Tuesday, this should have been a relatively quiet and cautious trading day. After all, no one knows whether Big Al is pondering an interest-rate hike, so his testimony will receive even more than the usual microscopic scrutiny and deciphering.
But the scads of merger activity was too much to resist, and traders quickly succumbed to a broad-based buying spree.
"With corporate sales slowing, the way to grow is to acquire it," said Alexander Paris Sr., an analyst with Barrington Research. "This is going to be another big merger year, and this will hold up stocks."
They were in a marryin' mood in the energy business. Dominion Resources (D) got the ball rolling with its US$6.3 billion acquisition of Consolidated Natural Gas (CNG), while Sempra Energy (SRE) chimed in with its nearly $2 billion buyout of KN Energy (KNE). In aerospace, meanwhile, United Technologies (UTX), maker of Pratt & Whitney jet engines, will shell out about $4.3 billion for parts manufacturer Sundstrand (SNS).
Tax preparer H&R Block (HRB) also may be looking to get hitched. The company said it's in talks for a "possible business combination" with accounting firm McGladrey & Pullen. Separately, Block's stock advanced $2.06 to $43.19 after the company posted a narrower-than-expected quarterly loss of 3 cents a share.
Among the .com crowd, online software retailer Beyond.com (BYND) climbed $1.75 to $26.50 after saying it will acquire rival Buydirect.com for about $134 million. And CNET (CNET) was $3.50 higher at $119.50 on word that it will get into the auction biz with its $5.8 million takeover of AuctionGate Interactive.
ETrade (EGRP) soared 16 percent to $46.50 after a Credit Suisse First Boston analyst told The Wall Street Journal that the Net-based broker is mulling a "long-term relationship" with venerable Goldman Sachs, as the latter seeks a way to finally cash in on the boom in online trading. ETrade also caught investors' fancy with the debut of its first mutual fund, the ETrade S&P 500 index fund.
America Online (AOL) gained $8.50 to $168.88 as it gave a new suit of clothes to its CompuServe unit. The idea is to position CompuServe as the online service for grownups. Meantime, a two-for-one split of AOL's stock takes effect after the closing bell.
Lastly, it was another fine day for Microsoft's lawyers, who chalked up a few more billing hours as additional lawsuits were filed alleging that Redmond -- get this -- uses its industry dominance to overcharge customers for software. Microsoft (MSFT) slipped $1.63 to $146.13.
