Stocks surged to close higher today in the wake of four major U.S. corporate mergers, signaling a possible rebirth of investor confidence in the equities market.
The Dow Jones Industrial Average climbed as much as 150.87 points before closing up 114.05 points or 1.33 percent, at 8,706.15. The technology-heavy Nasdaq Composite Index jumped 29.49 points or 1.66 percent, to 1,800.88. The Nasdaq pushed above the 1,800 mark for the first time since late August.
Shares of Web portal Yahoo jumped to a new 52-week high after the company today announced an agreement with the Wall Street Journal Interactive Edition to post selected career content from the careers section to Yahoo! Employment users. The stock surged 14.16 or 10.82 percent to 145-- well higher than the stock's previous 52-week high of 134.63.
Merger mania returned to Wall Street today after a prolonged dry spell as companies dashed any merger and acquisition plans during the down market.
BMC Software announced it will acquire mainframe software maker Boole & Babbage in a deal valued at $900 million. Boole stock soared 13.15 percent following the news, as shares of BMC dropped 4.16 percent in today.
In other sectors, CMS Energy plans to buy Panhandle Eastern Pipe Line in a $2.2 billion deal. Also, cardiac device maker Medtronic moved to buy neurological device maker Sofamor Danek in a stock swap worth more than $3.37 billion.
"Today's merger and acquisitions activity is a reflection that buyers think that stocks are cheap," said Brean Murray senior equity trader Peter Coolidge. "But the bigger picture you can't lose sight of is that we are in the midst of a strong market up-trend."
Indeed, the blue chip index rallied 749.48 points or 9.6 percent during October, posting its biggest point-gain in one month ever.
"How long it will last is anyone's guess," said Coolidge, adding, "The uncertainty of six weeks ago has been replaced by optimism and a feeling that there's much value created in the sell-offs."
Telecommunications equipment maker Ciena continued to surge today on persistant rumors that the company may be bought out, traders said. Ciena shares jumped 26.91 percent to 21.81, and was the most actively trade stock on the Nasdaq market today, with 37.3 million shares traded.
Small cap issue TCI Music jumped 45 percent after the company announced a deal between its music unit SonicNet and America Online. SonicNet will be one of four anchor tenants on AOL's music area, planned to launch in December. Shares closed up 1.5 to 4.8125.
Most major Internet stocks also followed the market higher today, including shares of online book and music retailer Amazon.com, which climbed 3.61 percent to 131. Some other gainers were Web portals Excite and Lycos, posting a rise of 3.4 percent and 5.23 percent, respectively.
Browser software maker and Web portal Netscape Communications soared 13.99 percent to 24.44, and was the ninth most actively trade stock on the Nasdaq market today, with 8.7 million shares traded.