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Stock Market Today: Will M&A Talks Keep Stoking Stocks? – Money Morning

This is a syndicated repost published with the permission of Money Morning. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

Investors returned to the stock market today (Tuesday) in a buoyant mood after a break Monday for President’s Day.

Just before noon, the Dow Jones Industrial Average had climbed 56 points, or 40%, to 14,037; the Standard & Poor’s 500 Index rose 8, or .48%, to 1,526; and the Nasdaq advanced 12, or .33%, to 3,201.

The S&P is on track to log its eighth consecutive week of gains and sits just 3% from its all-time high. And while the Dow eased 0.1% last week, it’s just 183 points from its record high.

Following a rash of deal-making last week, more merger talks were fueling gains Tuesday.

Also nudging markets higher was a report showing German investor confidence rose more than expected in February, hitting the highest level in about three years. The jump suggests Europe’s largest economy is bouncing back from its slump.

The ZEW Center for European Economic Research in Manheim said its index of investor and analyst expectations, a gauge of economic developments six months in advance, soared to 48.2 in February from 31.5 in January. That was the highest read since April 2010, and handily beat forecasts of 35.

The news sent European markets broadly higher with the Stoxx Europe 600 rising 1%.

Market participants stateside shrugged off data from the National Association of Home Builders/Well Fargo Housing Market index, which inched down in February to 46 from 47 in January.

The report, a reflection of confidence among homebuilders, showed its first weakening since April, weighed down by looming economic uncertainty and tight lending standards.

Investors will see more on the housing market front when January home starts are released Wednesday and existing home sales are issued Thursday.

Stock Market Today: What’s Moving?

With little on the economic front Tuesday, the boost in the stock market today came mainly from fresh M&A talks.

“Companies are starting to move cash, which has been building up in the last decade. That would be a supporting theme to this dealing of the economy – companies are gaining confidence,” Greg Peterson, director of investment research at Waltham, MA-based Ballentine Partners LLC told The Wall Street Journal.

The Journal was the first to report Office Depot Inc. (NYSE: ODP) and OfficeMax Inc. (NYSE: OMX) are in the midst of inking a merger agreement in a stock-for-stock deal. ODP shares rose 15%, OMX shares, 26%. The chatter also lifted shares of Staples Inc. (Nasdaq: SPLS) more than 14%.

It was a historic day for Google Inc. (Nasdaq: GOOG) when shares hit an all-time high intraday Tuesday of $804.

The milestone came more than five years after the Internet search giant’s shares soared to more than $700.

The lofty price comes amid growing confidence in the company’s prowess to post steadily higher profits from its prominent presence in web search and more recently, the mobile market.

Meanwhile, Apple Inc. (Nasdaq: AAPL) shares continued to lose ground, shedding $5.55 to $454, a long way off its high of $705.07, hit in September 2011.

Institutional investors shed millions of shares of the maker of iPhones, iPads and iPods in Q4 amid growing concerns of saturation in the smartphone market and worries of slowing growth.

Meanwhile, health insurers’ shares declined after a government agency proposed reimbursing insurance companies for Medicare Advantage (a healthcare plan for seniors) at a lower rate than was anticipated.

The biggest decliner among S&P 500 companies was health insurer Humana Inc. (NYSE: HUM), falling 7.85%. UnitedHealth Group (NYSE: UNH) was down 2.32%, and Cigna Corp. (NYSE: CI) off 1.54%.

Also Tuesday, gold prices slipped as additional technical selling pressure pulled the yellow metal lower on the heels of Friday’s slide. Gold was down $5.40 an ounce, to $1,604.

Traders may be positioning themselves ahead of Wednesday’s release of the minutes from January’s Federal Open Market Committee meeting, which might hold some clues about when and why the Fed will decide to scale back its quantitative easing, which has helped boost gold.

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