Stocks have held on to early gains that were inspired by the prospect of further stimulus to the Chinese economy after disconcerting trade figures overnight.
“Once again, bad news has become good news, for stock markets at least,” observed Chris Beauchamp at spread betting firm IG.
“China’s dire straits imply problems for the US economy too, and the theory goes that this knocks back the chance of a September move on interest rates. With a week still to go, there is still the chance that this new thesis will be demolished, but for now equities seem the place to be,” Beauchamp suggested.
At 3:39 p.m. in New York, the S&P 500 was 46 points, or 2.4%, higher at 1,967, while the Dow Jones industrial average was 380 points firmer at 16,482 and the Nasdaq Composite was 126 points to the good at 4,808.
All 30 members of the Dow were in positive territory, with industrial holding company General Electric (NYSE:GE) leading the way, up 3.6%, after its proposed acquisition of the energy business of Alstom got clearance from European and US regulators.
Beleaguered social media giant Twitter (NYSE:TWTR) was down in the dumps, shedding 92 cents at US$27.23 after Mike Gupta, a senior vice president at the company, jumped ship to be a chief financial officer at a start-up company.
Bid activity has provided most of the excitement in terms of news flow, with TECO Energy (NYSE:TE) up 26% after welcoming a takeover approach late last week by Emera (TSE:EMA).
The Canadian energy and services company is proposing to offer US$27.55 for each TECO share in a deal that values the US utility at US$10.4bn once the assumption of the US firm’s debt is factored in.
SunEdison (NYSE:SUNE) advanced in morning trade after the provider of photovoltaic energy agreed to acquire a 33% interest in a portfolio of solar assets from Dominion Resources (NYSE:D) for roughly US$300mln.
Shares of the Maryland Heights, Minnesota-based company were up 7.3% at US$12.86, after reaching US$12.88 at one point. Dominion’s shares were up 2.1% at US$68.59.
Strategic Hotels (NYSE:BEE) climbed 47 cents to US$14.07 after agreeing to be bought out by private equity firm Blackstone for US$6bn, equivalent to US$14.25 a share.
Canadian healthcare group Concordia (NASDAQ:CXRX, TSE:CXR) fell back after it announced it is to pay US$3.5bn to acquire Amdipharm Mercury in a cash plus stock deal.
European private equity group Cinven has agreed to sell Amdipharm for £800mln (circa US$1.2bn) plus 8.49mln common shares of Concordia, valued at around US$0.7bn, while Concordia will also take on around US$1.4bn of the acquired company’s debt.
Concordia shares shed 9.9% at US$75.72.
Fast moving consumer goods maker Procter & Gamble (NYSE:PG), up 1.6%, under-performed the market despite SunTrust Robinson Humphrey upgrading the stock.