Mergers, Data Give Shares a Boost - TheStreet

Updated from 4:06 p.m. EST

Stocks ended with modest gains Monday, boosted by news of a slew of mergers, positive economic data and some upbeat earnings announcements.

The

Dow Jones Industrial Average

rose 26 points, or 0.3%, to 9608, while the

S&P 500

gained 2 points, or 0.2%, to 1031. The

Nasdaq

rose 17 points, or 0.9%, to 1883. The 10-year Treasury note fell 7/32 to yield 4.26%.

The day's biggest merger news came from

Bank of America

(BAC) - Get Report

, which agreed to acquire

FleetBoston

( FBF) for stock worth $47 billion. Shares of Bank of America ended down $8.29, or 10.1%, at $73.57, while shares of FleetBoston closed up $7.36, or 23%, at $39.16, below the offer price of $45 a share.

Additionally,

Anthem

(ATH) - Get Report

will acquire

WellPoint

(WLP)

for $16 billion, creating the country's largest HMO. The combined company, to be called WellPoint, will have about 26 million subscribers. Anthem shares fell $6.21, or 8%, to $71.05, while WellPoint shares added $7.16, or 8.5%, to $91.09. Separately, Anthem reported quarterly earnings of $1.35 a share, beating analysts' estimates by 2 cents, on a 20% increase in revenue.

In other merger news,

United Health

(UNH) - Get Report

said it intends to acquire

Mid-Atlantic Medical

( MME) for $3 billion in cash and stock. Also,

Symantec

(SYMC) - Get Report

said it will buy

ON Technology

( ONTC) for $100 million in cash. Meanwhile,

InterActive

(IACI)

intends to buy

Anyway.com

for $62 million. Anyway.com is based in France and is a subsidiary of

Transat

, a packaged-tours company based in Canada.

Shares of United Health dropped $1.87, or 3.5%, to $52.38, while shares of Mid-Atlantic Medical rose $5.74, or 10.7%, to $59.62. Symantec's stock lost 14 cents, or 0.2%, to $65.45, while ON Technology shares increased 13.9%, or 48 cents, to $3.93. InterActive shares inched up 22 cents, or 0.6%, to $37.71.

"Takeover news is bullish because it demonstrates confidence on the part of business leaders," said Ken Tower, chief market strategist at CyberTrader.

Winners beat losers by a margin of about 2 to 1. Volume was about 1.36 billion trades on the

New York Stock Exchange

and about 1.48 billion trades on the Nasdaq.

Positive economic reports added to market gains. The National Association of Realtors said September existing-home sales rose to 6.69 million units, ahead of the analyst forecast of 6.3 million and vs. August's revised amount of 6.46 million. Additionally, the Commerce Department new-home sales for September were 1.145 million, beating the consensus of 1.125 million but below August's revised figure of 1.147 million.

The session's biggest earnings news was from

Procter & Gamble

(PG) - Get Report

, which said net income was $1.26 a share in the September quarter on a 13% jump in revenue to $12.2 billion. Analysts had forecast earnings of about $1.25 a share. For its fiscal second quarter, P&G expects to earn $1.24 to $1.27 a share, roughly in line with consensus estimates. Shares of the company ended up 74 cents, or 0.8%, at $96.80.

In other earnings reports,

International Paper

(IP) - Get Report

missed analysts' estimates by a penny, earning 24 cents a share, before items, on flat revenue. Shares lost 44 cents, or 1.1%, to $38.

Borg-Warner

(BWA) - Get Report

beat analysts' consensus estimates by 2 cents, earning $1.28 a share in its third quarter. Revenue rose 10% to $752.2 million. The company now expects full-year earnings of $6.25 to $6.35 a share, within range of analysts' guidance of $6.31 a share. Shares of Borg-Warner added 76 cents, or 1%, to $75.76.

Sysco

(SYY) - Get Report

reported first-quarter earnings that were a penny ahead of analysts' consensus of 31 cents a share. Sales rose 11% to $7.13 billion. The stock ended up $1.25, or 3.9%, at $33.24.

Late in the day,

American Express

(AXP) - Get Report

reported third-quarter earnings of 59 cents a share, a penny above analysts' estimates, while sales rose 9% to $6.42 billion. For the full year, the company guided to $2.26 to $2.29 a share, largely in line with analysts' forecast of $2.29 a share. Shares of American Express nevertheless closed down 87 cents, or 1.8%, at $46.75.

In analyst action, Bank of America was downgraded and its price target cut at Piper Jaffray on risks related to its acquisition of FleetBoston. And

Kohl's

(KSS) - Get Report

was upgraded at Piper Jaffray based on valuation. Shares of Kohl's closed up $1.78, or 3.4%, at $54.15.

CVS

(CVS) - Get Report

was upgraded at J.P. Morgan on the belief that earnings would benefit if the company acquired Eckerd's, the pharmacy chain owned by

J.C. Penney

(JCP) - Get Report

. Shares of CVS added $1.40, or 4.2%, to $35.09.

Meanwhile, Bear Stearns raised its revenue forecast for the semiconductor industry to $188.1 billion from $177.4 billion.

In currency trading, the dollar was down against the yen but up against the euro.

Markets overseas ended higher. London's FTSE 100 closed up 0.3% at 4251, while Germany's Xetra DAX rose 2% to 3520. In Asia, the Nikkei rose 1.2% to 10,454, and Hong Kong's Hang Seng gained 0.1% to 11,750.

U.S. stocks are coming off a week in which the Dow sank 139 points, or 1.4%, to 9721, while the S&P 500 dropped 10 points, or 1%, to 1028 and the Nasdaq lost 46 points, or 2.4%, to 1865.

Analysts had mixed reviews for the now waning earnings season.

"On the surface, third-quarter earnings season looks great, but there was still not enough in the likes of what

IBM

,

Microsoft

,

Caterpillar

and

General Electric

had to say about the future to leave a fully priced market with more rally fuel," said David Rosenberg, chief North American economist at Merrill Lynch. "Momentum, valuation and liquidity are not market-friendly at this time."