Dow Hits Record on Possible Verizon Deal
Monday, July 16, 2007; 6:44 PM
NEW YORK -- Blue chip stocks rose Monday as news of a potential big telecom deal involving Verizon pushed the Dow Jones industrials to a new record close, and put the index closer to 14,000. Overall, stocks traded were mixed as investors digested the market's huge gains of last week.
While broader market indexes showed slight declines, the notion of a Verizon deal appeared to inject Wall Street with fresh optimism and helped stocks mostly hold last week's sizable gains because buyout activity has been a big driver for the stock market in the past year.
Although Vodafone Group PLC denied a report by the Financial Times that it is weighing whether to make a huge $160 billion bid for Verizon Communications Inc., investors appeared undeterred. The report cautioned that Vodafone has yet to approach Verizon; a deal could give Vodafone full ownership of Verizon Wireless, which Vodafone and Verizon now own jointly.
"I think just the idea of the number floated _ $160 billion _ gets the juices running in the market again even after this big move," said Greg Church, chief investment officer of Church Capital Management in Yardley, Pa., referring to last week's gains. "It would be the biggest deal ever. People want to be at the party and they don't want miss it."
The Dow rose 43.73, or 0.31 percent, to 13,950.98 _ its 30th record close since the start of the year. The benchmark index, which came off of highs from earlier in the session, again set a trading high, hitting 13,989.11, less than 11 points from 14,000. The previous high of 13,932.29 came in Friday's session, which also saw a record close.
Also helping the Dow, construction equipment maker Caterpillar Inc. hit a new high of $86.49, and closed at $85.90. United Technologies Corp., also a Dow component, hit a 52-week high of $76.98 before it closed at $76.67.
Broader stock indicators slipped lower Monday. The Standard & Poor's 500 index slipped 2.98, or 0.19 percent, to 1,549.52. The S&P set a fresh trading high of 1,555.90, topping a high of 1,555.10 set Friday when the index surged past a trading high set in March 2000.
The Nasdaq composite index fell 9.67, or 0.36 percent, to 2,697.33.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 2.70 billion shares, down from 2.75 billion on Friday.
Bonds rose Monday, with the yield on the benchmark 10-year Treasury note falling to 5.04 percent from 5.10 percent late Friday.
On Monday, light, sweet crude futures rose 22 cents to $74.15 on the New York Mercantile Exchange. Oil hadn't closed above that level since mid-August.
The dollar was mixed against other major currencies and continued to hover near its record lows against the euro. Gold prices fell.