Coming off a three-week losing streak, blast out of the gate Monday
The U.S. stock market, which is looking to snap a three-week losing streak, kicked off the new week in rally mode Monday as investors eyed more retail earnings, digest news related to corporate deals and await Wednesday's release of minutes of the Federal Reserve's April meeting.
The Dow Jones industrial average was about 179 points, or 1.0%, to 17.715. The Dow's rise was helped by a nearly 4% jump in shares of Dow component Apple (AAPL), after Warren Buffett's Berkshire Hathaway reported a $900 million stake in the iPhone maker in an SEC filing.
The S&P 500 was up 1.0% and the Nasdaq composite index gained 1.2%. Oil prices jumped with U.S. crude gaining more than 3.0% to nearly $48 a barrel.
Warren Buffett's Berkshire Hathaway has $900 million stake in Apple
Both the Dow Jones industrial average and Standard & Poor's 500 stock index fell for the third straight week last week, hurt by a barrage of weaker-than-expected quarterly profit results from well-known retailers, including department store giant Macy's and high-end retailer Nordstrom. Weakness in the retail space, however, was offset somewhat Friday by better-than-expected April retail sales data. Still, the stock market rally that began in mid-February has stalled, hurt by rising valuations, weak earnings and continued angst over the timing and impact of the Fed's next rate hike.
Wall Street is bracing for a busy week. The earnings parade picks up briskly Tuesday with results from home improvement retailer Home Depot, with fellow retailers Lowe's, Target, Walmart, Gap and FootLocker reporting later in the week. After last week's poor results, Wall Street will be watching closely to see how other key retailers fared.
Investors will also glean minutes of the Fed's April meeting to determine if the market's current low odds of a June interest rate hike are too low and whether the risk of a surpirse rate hike are increasing.
Traders were reacting to a number of deals. Drugmaker Pfizer (PFE) announced it was buying Anacor Pharmaceuticals (ANAC) for $99.25 per share, or $5.2 million. Anacor shares jumped 57% to close at $100.67.
Gannett (GCI), parent company of USA TODAY, said it upped its bid for Tribune Publishing to $15 per share from an initial offer of $12.25. And Yahoo (YHOO) shares gained 2.7% amid reports that billionaire Warren Buffett and Berkshire Hathaway (BRK-A) might provide financing to Quicken Loans founder Dan Gilbert, who is said to be interested in buying the Internet company.
Investors were also digesting a weak manufacturing data point for the New York state regions, with the Empire State manufacturing index coming in a -9 in May, vs. a +9.6 reading in April and an estimate of positive 9.6.