Traders-Blog.com

Stocks rose today, boosted by merger news and speculation that more deals were in the works, which helped offset caution in the market as the Federal Reserve’s two-day meeting on interest rates got underway. Return of deals is a sign that confidence is returning to the marketplace. Investors welcomed a strong report on housing and the start of the two-day Federal Reserve policy meeting.

Today, the Dow Jones industrial average closed up 61.93 or 0.51% to 12,288.10, the broader S&P 500 closed up 8.88 or 0.63% to 1,410.94, and the Nasdaq closed up 13.80 or 0.58% to 2,408.21.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by 23 to 9 on volume of nearly 1.46 billion shares. On the Nasdaq, advancers topped decliners 19 to 10 on volume of 1.73 billion shares.

Today’s gains were fueled by technology, transportation and commodity shares and sparked partly by the housing report. Housing starts rebounded from a nine-year low, but ongoing weakness led builders to pull back on plans for more housing. Starts of new homes jumped to an annual rate of 1.53 million last month.

Investors are keenly looking towards the two-day Fed policy meeting, with a decision due tomorrow afternoon. The Fed is expected to hold interest rates steady at 5.25% for the sixth meeting in a row. Investors will be attuned to what the statement says about the outlook for economy and interest rates.

Shares of Halliburton closed down $1.90 or 4.7% to $30.50, on profit warning from the oilfield services company. The oil services company said first-quarter earnings would lag Wall Street’s estimates.

Shares of Accredited Home Lenders closed up $1.82 or 20% to $10.77, on news that it has received a $200 million loan. The sub-prime mortgage lender has seen its stock battered over the past few weeks as it has struggled to raise money, with many of its partners cutting the company off because of the fallout in the sector.

Stock of Affiliated Computer Service closed up $8.66 or 17% to $59.95, on news that it is being taken private by a group that includes the company’s founder. The deal is worth $8.2 billion in cash and debt. They have submitted a proposal to buy all the shares at $59.25 each, equivalent to a 15.5 percent premium over its closing price on Monday.

Stock of ABM AMRO bank closed down $0.13 to $41.23, on news that it is discussing to be acquired by Barclays bank for for $80 billion. Shares of Barklays closed up $1.85 to $55.20. No details of the structure of any deal were released, but at current values a combination would create a $166 billion financial services giant.

U.S. light crude oil for April delivery rose 14 cents to settle at $56.73 a barrel in volatile trading on the New York Mercantile Exchange.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter
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