Wall Street surges to new records, boosted by cyclicals
NEW YORK: US stocks rose on Monday, with major indexes hitting fresh records on the back of multiple merger deals and hopes that China will take further accommodative monetary policy action.
Equities closed a fifth straight week of advances Friday, with the Dow and S&P 500 ending at closing records on the back of accommodative action from central banks in China and Europe.
Sources told Reuters that the Chinese leadership and central bank were ready to cut interest rates again and loosen lending restrictions. Such policy changes in the world's second-biggest economy could spur more market gains.
'The carry-over effect from China, taken with the fact that the US is pretty healthy, and you have a market with a bias to trend higher, especially on the cyclical front,' said Mike Gibbs, who helps oversee more than $500 billion as co-head of the equity advisory group at Raymond James in Memphis, Tennessee.
Cyclical groups - tied to the pace of economic growth - led gains, with the S&P financial sector up 0.7 percent. JPMorgan Chase & Co was up 1.3 per centto $61.21.
The weakest group was telecom, considered a defensive play that underperforms in periods of economic expansion. The group fell 2.1 percent, with AT&T down 2.3 per centto $34.46 and Verizon off 2.5 per centat $48.99.
RenaissanceRe Holdings Ltd agreed to buy Platinum Underwriters Holdings Ltd for $1.9 billion.
BioMarin Pharmaceuticals Inc said it would buy Dutch drug developer Prosensa Holding NV for about $840 million including milestone payments.
Prosena soared 61 per centto $18.43 while Platinum was up 19 per centat $72.90.
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