Stock futures inch higher on dealmaking
NEW YORK (AP) -- Stock futures edged higher Monday on corporate dealmaking in the airline
, consumer products and retailing segments.
With no new economic reports to be released, investors turned their attention to individual companies for insight into the health of the economy.
Consumer products maker Unilever NV agreed to buy beauty products maker Alberto Culver Co. for $3.7 billion. Southwest Airlines Co. will purchase AirTran Holdings Inc. for about $1.4 billion. Wal-Mart Stores Inc. proposed to buy South African consumer goods distributor Massmart Holdings Ltd. for about $4.25 billion.
Corporate takeovers are a positive sign for the economy because they mean companies are increasingly willing to take large cash reserves built up during the recession and invest them to grow operations.
Stocks have rallied sharply throughout the month as investors gained more confidence that the economy will grow, even if only at a sluggish pace. Economic reports have regularly topped modest forecasts and mergers and acquisitions activity has picked up.
The Dow Jones industrial average is up 8.4 percent for the month. The Dow's four-week winning streak is its longest since an eight-week streak that ended in late April when stocks hit their highest levels of the year.
Ahead of the opening bell, Dow Jones industrial average futures rose 14, or 0.1 percent, to 10,799. Standard & Poor's 500 index futures rose 1.30, or 0.1 percent, to 1,144.50, while Nasdaq 100 index futures rose 3.50, or 0.2 percent, to 2,021.75.
Movement in the market Monday could be subdued because there are no major economic reports due out. Traders get reports on consumer sentiment, weekly jobless claims and a final reading on second-quarter gross domestic product before the month wraps up Thursday.
On Friday, traders receive a key report on the manufacturing sector. The same report helped jump-start the September rally when it was released at the beginning of the month.
Shares of Unilever, which makes Dove soaps, Axe deodorants and Suave shampoos, rose 60 cents, or 2 percent, to $29.97 in pre-opening trading. Alberto Culver, which makes beauty products such as TRESemme, VO5 and Simple, jumped $6.06, or 19.3 percent, to $37.54.
AirTran shares jumped $2.79, or 61.3 percent, to $7.34. The deal valued Airtran shares at $7.69. Southwest fell 1 cent to $12.27.
Bond prices rose, indicating some investors continued to seek safer alternatives to stocks. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.56 percent from 2.61 percent late Friday.
Overseas, Britain's FTSE 100 fell 0.1 percent, Germany's DAX index rose 0.1 percent, and France's CAC-40 rose less than 0.1 percent. Japan's Nikkei stock average jumped 1.4 percent.
Stock futures inch higher on dealmaking
By: Steve R. Nicola
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