Wall Street erases earlier losses; M&A news, data support
By Angela Moon | February 15, 2013 3:42 AM EST
Stocks erased earlier losses to trade flat by late morning on Thursday as a flurry of M&A deals and better-than-expected jobs data fed optimism to the market, although signs of economic weakness in Europe and Japan curbed appetite for risky assets.
Among the M&A announcements, shares of H.J. Heinz Co
Also supporting the market, U.S. data showed the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. But data out of Europe showed a contraction of 0.6 percent in gross domestic product in the euro zone, the steepest for the bloc since the first quarter of 2009. Japan's GDP shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth.
"The only reason a company buys another company is because they see an upside. Even though we are at multiyear highs, this kind of activity shows that there is more room for a rally, feeding optimism to the market," said Randy Frederick, director of trading and derivatives at Charles Schwab.
"The jobless claims numbers were solid, and with the European market closing, the news out of Europe is pretty much done for the day."
But Frederick added the market would have to see small corrections before breaking above current levels, where indexes have been hovering for almost two weeks. The S&P 500 is up more than 6 percent so far this year, near its highest level since November 2007.
The Dow Jones industrial average <.DJI> was down 1.20 points, or 0.01 percent, at 13,981.71. The Standard & Poor's 500 Index <.SPX> was up 0.03 points, or 0.00 percent, at 1,520.36. The Nasdaq Composite Index <.IXIC> was down 2.65 points, or 0.08 percent, at 3,194.23.
American Airlines and US Airways Group
Shrinking European economies translated to a 5-percent drop in revenue from the region for Cisco Systems
General Motors Co
(Reporting By Angela Moon; Editing by Nick Zieminski)
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