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US stocks open slightly higher; Freescale jumps on deal
NEW YORK (AP) — The U.S. stock market headed higher Monday as deals and economic news gave stocks a lift.
KEEPING SCORE: The Dow Jones industrial average rose 95 points, or 0.5 percent, to 18,228 as of 10:10 a.m. Monday.
The Standard & Poor’s 500 index rose six points, or 0.3 percent, to 2,111, while the Nasdaq composite edged up 28 points, or 0.6 percent, to 4,991.
CHIPPY: NXP Semiconductors said Sunday it’s planning to acquire Freescale Semiconductor in an $11.8 billion deal. The merger would create the largest supplier of microchips for cars. Boards of both companies have already approved the deal, but regulators still need to sign off on it. NXP’s stock jumped $11.52, or 14 percent, to $96.40. Freescale soared $3.34, or 10 percent, to $39.45.
MERGER MONDAY: Hewlett-Packard announced an agreement to buy Aruba Networks, a company that makes Wi-Fi systems for shopping malls and hotels, for $2.7 billion. It’s the biggest deal for HP since Meg Whitman, its CEO, launched an effort to turn around the company. HP’s stock edged up 5 cents, or 0.1 percent, to $34.90. Aruba fell 41 cents, or 2 percent, to $24.40.
SPENDING: The government reported Monday that consumer spending dipped slightly in January, while income rose, reflecting strong job gains during the month. Economists had expected a dip in spending, reflecting a big drop in gas prices during the month. That decline could turn out to be a good sign for economic growth, as it gives people more money to spend on other goods.
SOLID MONTH: Last week, the stock market closed out its best monthly gain in more than three years. The S&P 500 climbed 5.5 percent, its strongest gain since October 2011, bouncing back from a January slump. The Dow surged 5.6 percent. Consumer companies and technology firms had the strongest gains.
EUROPE: Germany’s DAX slipped 0.3 percent, and France’s CAC 40 sank 1 percent. Britain’s FTSE 100 shed 0.3 percent.
ECONOMICS WATCH: Market sentiment in Europe did not hold up despite reports showing unemployment in the 19-country eurozone fell last month to its lowest since 2012 and that consumer prices were not dropping as sharply in February as in January. The figures are welcome news, but still show the currency union has a long way yet to improve. The European Central Bank is due to start its bond-buying stimulus program this month.
CHINA RATE CUT: The People’s Bank of China cut interest rates for the second time in three months Saturday, reducing the rate for one-year loans by commercial banks by 0.25 percentage point to 5.35 percent. The interest rate paid on a one-year deposit was lowered by 0.25 point to 2.50 percent. The latest round of cuts follow tax reductions and other measures meant to prop up growth. The government cut business taxes last week and has announced a pay hike for civil servants.
ASIA’S DAY: Japan’s Nikkei 225 gained 0.2 percent, and South Korea’s Kospi added 0.6 percent. In China, Hong Kong’s Hang Seng Index rose 0.3 percent, while the Shanghai Composite Index advanced 0.8 percent.
ENERGY: Benchmark U.S. crude oil rose 17 cents to $49.92 a barrel on the New York Mercantile Exchange. It gained $1.59 on Friday to $49.76 a barrel.
CURRENCIES: The dollar rose to 119.72 yen from 119.63 late Friday. The euro gained to $1.1229 from $1.1199.
BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.03 percent from 2 percent late Friday.
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