Wall Street was looking like its old running-of-the-bulls self Monday as a wave of mergers helped investors overcome their jitters about an upcoming congressional appearance by Fedmeister Alan Greenspan. Stocks posted impressive gains straight across the board.
With most tech and Internet shares advancing, ETrade Group was a standout 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 rose 212.73 points to close at 9552.68, and the Nasdaq Composite Index was up 58.81 at 2342.41. The S&P 500 gained 33 to 1272.22.
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 prompted traders to decide they'd been hasty in thinking that stocks were overvalued. And that was a good enough excuse for a 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."
As for Greenspan, Paris figures the Fed chief may play it cagey in signaling his intentions to the market. A recent flurry of strong economic numbers is offset by continued uncertainties abroad. "Greenspan is kind of caught in the middle," Paris said, "and the best thing may be to do nothing."
They were in a marryin' mood in the energy sector. 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, 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 $3.38 to $44.50 after the company posted a narrower-than-expected quarterly loss of 3 cents a share.
Lucent Technologies (LU) also got in on the act, rising $3.50 to $106.50 with its purchase of Sybarus Technologies, a privately held Canadian chip-design outfit. Financial terms weren't disclosed. Meantime, network-chip designer SEEQ Technology (SEEQ) rocketed 26 percent higher to $2.56 on news of its roughly $100 million acquisition by LSI Logic (LSI), which was up 88 cents at $28.13.
Among the .com crowd, online software retailer Beyond.com (BYND) climbed $1.81 to $26.56 after saying it will acquire rival Buydirect.com for about $134 million. And CNET (CNET) was $5.94 higher at $121.94 on word that it will get into the auction biz with its $5.8 million takeover of AuctionGate Interactive.
ETrade (EGRP) soared 21 percent to $48.56 after The Wall Street Journal reported that the Net-based broker is mulling a "long-term relationship" with 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 $13 to $173.38 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 was to take effect after the closing bell.
Among other Net notables, Yahoo (YHOO) jumped $9.69 to $145, and Infoseek (SEEK) was up 12 percent at $68.69. EBay (EBAY) accelerated 16 percent to $278.75, and Amazon.com (AMZN) was $4.63 higher at $106.50.
In tech, International Business Machines (IBM) advanced $6.31 to $177.94 as it said it had found a way to put both memory and logic circuits on a single sliver of silicon, hastening the advent of so-called system-on-a-chip technology and a new generation of smaller, cheaper electronic gadgets. Big Blue said it expects to start designing the new chips in a couple of months.
For its part, Advanced Micro Devices (AMD) vaulted 8.9 percent to $19.19 as the chipmaker expanded its relationship with Gateway 2000 (GTW), which plans to start shipping PCs with AMD's K6 processors by this summer. Gateway was up $6.31 at $79.19.
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. Still, Microsoft (MSFT) rose $1.25 to $149.
Lastly, the Net factor made its presence known once again. This time we have Room Plus (PLUS) surging 74 percent to $2.06 on word that it will begin hawking its wares online. Who's Room Plus, you ask? The press release describes it as "the largest and leading vertically integrated mica-laminated furniture company in New York, New Jersey, and Pennsylvania."
Mica-laminated furniture -- now there's a rock-solid Internet play. You bet.
