Bulls stage record rally on Wall Street
Dow tops 13,700 mark for first time, helped by Rio Tinto-Alcan deal and monthly retail sales numbers.
NEW YORK (CNNMoney.com) -- The Dow Jones industrial average surged into record territory Thursday, topping 13,700 for the first time ever, helped by takeover news and some strong retail monthly sales numbers.
The Dow (up 179.48 to 13,757.35, Charts) jumped about 183 points, or about 1.4 percent 3 hours into the session, after touching a record trading high of 13,768.57, breaking the previous record of 13,692 set June 4.
The Dow was also trading above its record closing high of 13,676.32 which was reached on June 1.
Stocks got a lift from merger activity Thursday as mining giant Rio Tinto (down $13.92 to $310.50, Charts) announced it agreed to buy Alcan in a deal valued at $38.1 billion. The deal would create the world's largest aluminum producer and thwart Alcoa's hostile bid for the Canadian company.
Alcan (up $9.80 to $99.40, Charts) shares surged over 10 percent on the New York Stock Exchange, while Alcoa (up $2.93 to $45.36, Charts, Fortune 500) led the gainers on the Dow 30, climbing over 7 percent in midday trade.
"People were talking about M&A being dead, but it's not dead - we had a good old fashioned bidding war for Alcan," said Todd Clark, director of stock trading at Nollenberger Capital Partners Inc. in San Francisco.
In other takeover news, Apollo Management's Hexion Specialty Chemicals said it agreed to buy chemical maker Huntsman in an all-cash deal worth $6.5 billion. Huntsman (down $1.17 to $26.40, Charts, Fortune 500) shares, however, fell over 4 percent on the New York Stock Exchange.
But some better than expected retail sales readings for June provided a big boost for stocks, said Clark, as many on Wall Street were anticipating some weak numbers.
"A bunch of people were caught off guard by that," he said. "Even though the housing sector is not great and energy prices are up, consumers seem fairly resilient."
Wal-Mart delivered some impressive results, reporting that same-store sales rose 2.4 percent, almost three times higher than forecasts. Wal-Mart (up $1.01 to $48.69, Charts, Fortune 500) shares climbed over 2 percent on the news.
The S&P Retail Index was up 1.5 percent in late morning trade.
In corporate news, GE (up $0.07 to $38.27, Charts, Fortune 500) and Abbott (down $0.02 to $53.19, Charts, Fortune 500) said after the market close Wednesday they had terminated a proposed $8 billion deal for GE to buy two Abbott businesses because they couldn't agree on final terms.
On the economic front, the trade gap widened in May, meeting economists expectations, with much of the rising gap due to oil prices.
Weekly jobless claims fell more than expected to 308,000 last week, the Labor Department reported.
Treasury prices eased, taking the yield on the 10-year note to 5.10 percent from the 5.09 percent level reached late Wednesday. The dollar continued to slide against the euro and the yen in early trading.
Oil prices climbed toward $73 a barrel, as U.S. light crude for August gained 24 cents to $72.80 a barrel on the New York Mercantile Exchange.