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Nasdaq posts a record close as media stocks continue climbing on merger talk

The Dow fell around 20 points as a decline in financial stocks overshadowed Walt Disney's gains
Wall Street
Media stocks gave the Nasdaq a 60-point boost

The US benchmarks ended the day on a mixed note.

The tech-heavy Nasdaq posted a record close, seeing a more than 60-point boost as media stocks continue to benefit from mergers.

The Dow Jones Industrial Average fell more than 20 points as Walt Disney Co (NYSE:DIS) gains were offset by a decline in financial stocks.

The S&P 500 saw slight gains, ending the day up around 7 points.  

Up north, the TSX jumped more than 60 points as gains in gold and tech made up for healthcare losses.

The Russell 2000 small-cap index saw minimal gains, boosted by Etsy Inc (NASDAQ:ETSY) and Teligent Inc (NASDAQ:TLGT).

1 PM: Fears of a flattening yield curve are weighing on the Dow

Fears of a flattening yield curve are weighing on the Dow Jones Industrial Average in midday trade. The central bank has signaled that it plans to hike rates beyond neutral in short order. The markets are now anticipating a total of four quarter-point rate hikes in 2018, up from three previously.

That explains why the Dow Jones Industrial Average ticked down 28.63 points, or 0.12% to 25,171 while the S&P 500 gained 0.3% to 2783.

The tech-laden Nasdaq Composite index jumped 0.8% to 7,756 led by Comcast Corp. which was up nearly 4% after BTIG analyst Rich Greenfield said it has a "surprisingly good chance" of winning a bidding war against Walt Disney Co. for Twenty-First Century Fox assets. Walt Disney shares were also up nearly 2% on the New York Stock Exchange to US$108.34.

The small-cap Russell 2000 index was up 3.18 points or 0.19% up to 1,679.72.

10 AM: US stocks open higher due to a solid May retail sales report

US stocks jumped higher out of the starting gate Thursday as optimistic economic data and a resurgence in takeovers lifted investors' spirits.

A report from the Commerce department that US retail sales climbed 0.8% in May, recording their best performance since last November, contributed to the positive vibes in the market.

The report followed yesterday’s decision by the Federal Reserve to hike interest rates for the second time this year on the view that the labor market is steadying and economic activity in the US is “rising at a solid rate”.

The federal funds target rate is now between 1.75 and 2 per cent, which marks its highest level in almost a decade.

Early in the trading session, the Dow Jones Industrial average added almost 80 points to hover at 25,281, led higher by Walt Disney, UnitedHealth Group and Caterpillar.

The S&P 500, meanwhile, clung closer to break-even levels, adding almost 9 points to trade at 2,784 while the tech-heavy Nasdaq jumped 42 points to climb to 7,738, led by Comcast, MercadoLibre, Charter Communications and DISH Network Corp.

Up in Canada, Toronto’s TSX added 33 points to trade at 16,299 while the Russell 2000 index of small-cap stocks stayed flat at 1,679.6.

The rosy news on the retail sales front also comes on the back of the European Central Bank’s move to keep interest rates unchanged at 0% until at least the middle of next year. Europe’s central bank is also taking the significant step of ending its quantitative easing program, whereby it buys back tens of billions of euros worth of government bonds every month to prop up the EU’s economic performance.  

Merger activity also pushed up share prices. Comcast (NASDAQ:CMCSA) shares were trading 4.8% higher at US$33.88 after the cable operator swooped in with a US$65bn all-cash offer for a chunk of the assets held by 21st Century Fox. 21st Century Fox’s shares also rose 1.36% to US$44.25 in the wake of the offer.

 


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