Wall St. Closes Higher as Dow Sets New Record

By REUTERS July 16, 2014

The stock market rose on Wednesday, buoyed by the latest merger news, as the Dow Jones industrial average reached a new record high.

The Dow gained 77.52 points, or 0.45 percent, to close at 17,138.20, according to preliminary figures. The Standard & Poor's 500-stock index rose 8.29 points, or 0.42 percent, to 1,981.57. The Nasdaq composite index added 9.58 points, or 0.22 percent, to 4,425.97.

Time Warner jumped 17.1 percent to $83.13, making it the best performer in the S.&P. 500, after 21st Century Fox confirmed that it made an $80 billion takeover offer for the company that was turned down. Shares of 21st Century Fox fell 4.6 percent to $32.57.

"It's a combination of M.&A. that has been pretty consistent — about every day we wake up to at least one, if not two deals — and earnings have continued to be good," said Bill Stone, chief investment strategist at PNC Wealth Management.

Intel climbed 9.3 percent to $34.65, making it the best performer in the Dow, after the chipmaker reported second-quarter results that topped analysts' estimates. The company also forecast third-quarter revenue above Wall Street's expectations.

"We've now come through the earlier stage of the earnings season, and while they haven't been stellar, they certainly have been good with just a few real disappointments," said Rick Meckler, president of LibertyView Capital Management.

"The market held back from moving higher for awhile but the overall good earnings and M.&A. deals are giving greater confidence for investors to stay invested," Mr. Meckler said.

A partnership struck between IBM and Apple also gave a boost to the market. IBM will exclusively sell iPhones and iPads loaded with applications geared at enterprise clients this fall. IBM shares gained 2.1 percent to $192.36, while Apple advanced 0.5 percent to $94.78.

The S.&P. technology sector gained 1 percent.

S.&P. 500 companies' profits are now expected to grow 4.8 percent in the second quarter, according to Thomson Reuters data, down from the 8.4 percent growth forecast at the start of April. Revenue is seen up 3.1 percent.

Bank of America lost 1.9 percent to $15.51. The second-largest American bank by assets reported a 43 percent drop in second-quarter profit as mortgage revenue fell and litigation costs increased. The Wall Street Journal reported that the bank also offered $13 billion to settle an investigation into mortgage securities it sold.

Yahoo shares slumped 5.1 percent to $33.79 after the Internet company reported disappointing financial results and outlook, although it pledged to pay shareholders at least half the proceeds from the Alibaba Group's initial public offering in the fall.

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