U.S. Stocks Rally, Dow Jones Surpasses 11,000 for First Time Since September 2008

Strategic Insights -

U.S. stocks surged on the back of takeovers and a $61 billion rescue for Greece, providing a boost to equities before the start of the first-quarter earnings season. The Dow Jones Industrial Average notched its first close above 11,000 since September 2008, as investors' optimism grew amidst a prolonged period of weekly gains. The S&P 500 Index also rose, with key companies such as Intel Corp. and JPMorgan Chase & Co. set to report their earnings in the coming days.

Key Takeaways:

  • The Dow Jones Industrial Average closed above 11,000 for the first time since September 2008, a significant milestone marking the ongoing recovery of the U.S. stock market.
  • Palm Inc. saw its stock surge 17% as the company's creator was reported to be seeking bids for the company, highlighting the potential for mergers and acquisitions in the tech sector.
  • DynCorp International Inc. rallied 48% after an agreement was reached for the company to be bought by Cerberus Capital Management LP, further indicating a surge in takeovers and buyouts.
  • Mirant Corp. and RRI Energy Inc. jumped more than 14% on plans to combine in a $1.6 billion merger, demonstrating the growing trend of consolidation in the energy sector.
  • Combined profit for S&P 500 companies is expected to increase by 30% in the first quarter from a year earlier, according to analyst estimates compiled by Bloomberg.
  • The premium on options that insure against losses in the S&P 500 has risen to its highest level since June 2008, indicating a growing concern among traders about potential losses.
  • The Chicago Board Options Exchange Volatility Index, or VIX, fell to 15.57, its lowest level since July 2007, highlighting the reduction in investor anxiety.

Statistics:

  • The Dow Jones Industrial Average rose 8.62 points, or 0.1 percent, to 11,005.97.
  • The S&P 500 Index increased 0.2 percent to 1,196.48 at 4 p.m. in New York.
  • Palm Inc. saw its stock surge 17 percent.
  • DynCorp International Inc. rallied 48 percent following an agreement to be bought by Cerberus Capital Management LP.
  • Mirant Corp. and RRI Energy Inc. jumped more than 14 percent on plans to combine in a $1.6 billion merger.
  • Combined profit for S&P 500 companies will increase by 30% in the first quarter from a year earlier.
  • The S&P 500 has jumped 77 percent from a 12-year low in March 2009.

Sources:

  • Bloomberg
  • Euclid Infotech Pvt. Ltd.
  • Syndigate.info
  • Albawaba.com