NEW YORK (AP) — Stocks managed a moderate advance yesterday, staying afloat as signs of strength in corporate takeover activity, jobs and overseas markets allowed investors to stomach a sharp rise in wholesale inflation.
Wall Street still displayed nervousness, however, selling off briefly after former Federal Reserve Chairman Alan Greenspan rekindled investors’ fears about subprime mortgages.
Most investors yesterday chose to pick up bargains after a 242-point drop in the Dow Jones Industrial Average on Tuesday and a 57-point recovery on Wednesday that suggested the market is holding above the index’s 12,000 mark — at least for now.
“There’s some optimism because the market had fallen quite a bit and it showed resilience [Wednesday], which is encouraging,” Ed Peters of PanAgora Asset Management.
A bidding battle for commodities exchange CBOT Holdings also aided stocks. Despite the cooling economy, merger activity and acquisition activity has been surging.
The Dow rose 26.28, or 0.22 percent, to 12,159.68. The Dow is 627 points below its closing high of 12,786.64, reached Feb. 20.
The Standard & Poor’s 500 Index gained 5.11, or 0.37 percent, to 1,392.28, and the Nasdaq Composite Index advanced 6.96, or 0.29 percent, to 2,378.70. The Russell 2000 Index of smaller companies rose 7.93, or 1.02 percent, at 783.61.
The dollar was mixed against other major currencies, and gold prices rose.
“We haven’t hit bottom yet, so we’re going to get these pretty violent swings,” said Barry James of James Investment Research. “But we don’t see this as the beginning of a big bear market yet. We think this just a normal correction.”
Stocks got a boost from IntercontinentalExchange Inc.’s unsolicited $9.9 billion all-stock bid for CBOT Holdings. ICE’s bid followed an already agreed-upon $8 billion takeover of CBOT by Chicago Mercantile Exchange Holdings.
CBOT rose $28.86, or 17 percent, to $194.95; ICE fell $3.83, or 3 percent, to $128.10; and CME fell $31.09, or 5.5 percent, to $532.88.
Cisco agreed to acquire Web conferencing company WebEx for $3.2 billion in cash, while General Electric’s Capital Solutions business and Blackstone Group agreed to buy PHH Corp. for $1.69 billion.
Cisco fell 4 cents to $25.81, and WebEx rose $10.18, or 22 percent, to $56.38.
GE rose 21 cents to $34.52, and PHH rose $3.29, or 11.8 percent, to $31.10.
The Labor Department yesterday said the number of Americans seeking unemployment benefits fell for the second straight week.
Japan’s Nikkei stock average rose 1.10 percent. Britain’s FTSE 100 gained 2.21 percent, Germany’s DAX index added 2.14 percent, and France’s CAC-40 advanced 1.77 percent.
Oil prices fell 61 cents to settle at $57.55 a barrel on the New York Mercantile Exchange after OPECagreed to keep output steady.
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