Financial Stocks Surge on Bank Takeover Bid and Intel's Revival

Strategic Insights -

Financial stocks led the rally on Wall Street yesterday, with Bank of New York's unsolicited bid for Mellon Bank sending shares soaring. The technology sector also saw gains, led by Intel's impressive surge to its highest level in months. Meanwhile, computer stocks fluctuated, with Dell Computer and Intel driving the gains, while IBM retreated slightly.

Key Takeaways:

  • Bank of New York's $22.9 billion bid for Mellon Bank sent financial shares jumping, with American Express rising $3 to $106 and J.P. Morgan increasing $2.56 1/4 to $142.62 1/2.
  • Intel soared $5.12 1/2 to $84.06 1/4, its highest level since early March, after the company announced plans to reignite growth and called recent profit weakness an aberration.
  • Dell Computer jumped $3.06 1/4 to $77.43 3/4, while IBM retreated $3.25 to $114.75 after reaching a 52-week peak.
  • The rally in financial stocks was bolstered by the acquisition rumors surrounding American Express and J.P. Morgan, which have long been potential takeover targets.
  • Warmer-Lambert (WLA) was an exception in the drug sector, vaulting to $191.37 1/2 before closing at $187.81 1/4, up $8.75, on strong sales of its anti-cholesterol and diabetes drugs.
  • General Electric's chairman forecast that almost half the firm's revenue will come from outside the United States by 2000, with services accounting for 70 percent or more of total revenue.

Statistics:

  • Bank of New York's bid for Mellon Bank was worth $22.9 billion.
  • American Express rose $3 to $106.
  • J.P. Morgan increased $2.56 1/4 to $142.62 1/2.
  • Intel soared $5.12 1/2 to $84.06 1/4.
  • Dell Computer jumped $3.06 1/4 to $77.43 3/4.
  • IBM retreated $3.25 to $114.75.
  • Warmer-Lambert (WLA) rose $8.75 to $187.81 1/4.

Sources:

  • "Tech News" article in The Wall Street Journal on an unspecified date.
  • "Finance News" article in USA Today on an unspecified date.