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By Nicholas
Jasinski | Monday, September 28 Merger
Moment. Investors enjoyed a
broad rally today, with all 11 sectors of the S&P
500 closing higher. Just four stocks in the
index lost most than a percent. It's the third-straight gain for the S&P
500, which added 1.6%. Merger
Monday didn't disappoint, with several announced and rumored deals in
multiple industries. Among them was a proposed merger of equals of Devon
Energy and WPX
Energy, both Oklahoma-based
shale oil producers. The combined company would be worth about $6 billion at
current market levels. Devon stock rose 11.1% today, while WPX added
16.4%. Lawrence Strauss has more
on that merger here. Iron ore
miner Cleveland-Cliffs also
said it would buy the U.S. steelmaking assets of ArcelorMittal for
$1.4 billion. It follows a $3.1 billion acquisition of AK Steel
for about $3.1 billion last year. As Al
Root noted
today, Cleveland-Cliffs will have gone from only selling iron
ore to now becoming the second-largest steel producer in North
America in under two years. Its stock jumped 11.6% today, and ArcelorMittal's
rose 10.6%. Finally, casino
operator Caesars Entertainment confirmed that it was in talks to
acquire William Hill for £2.9
billion ($3.7 billion). Private equity firm Apollo Management is
also interested in the U.K.-based bookmaker. The deal would be a bet on the
booming U.S. sports-betting market. Caesars stock advanced 2% today,
while William Hill's declined 11.6%—but that's after a 43% surge on Friday
when takeover talks were first reported. Jack
Denton covered
that bidding war from London. The stream
of potential mergers and acquisitions could deserve some of the credit for
the market's solid gains today. M&A activity tends to boost investors'
spirits. It reminds them that companies in strong positions are spending to
grow and improve themselves. It also makes investors wonder which company
could be the next acquisition target. That's a
particularly applicable catalyst for small-cap companies: The Russell
2000 index jumped 2.4% today. The Dow
Jones Industrial Average rose 1.5% and the Nasdaq
Composite gained 1.9%. |
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DJIA: +1.51% to 27,584.06 The Hot
Stock: Devon Energy +11.1% Best Sector:
Financials +2.4% |
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