Stocks rose solidly yesterday as a large number of mergers and other corporate deals lifted investors' confidence in the market and the economy. It was the market's best day in nearly two weeks.
"Historically, the December/January period is a strong one," said Erik Gustafson, portfolio manager at Stein, Roe & Farnham. "While the last couple of years have not seen that, some investors are expecting to see a more positive tone to the December/January timeframe."
Among the announced transactions, Amgen said it would buy rival Immunex for about $16 billion in cash and stock in the largest-ever biotechnology merger, giving Amgen the popular rheumatoid arthritis drug Enbrel. Amgen shares rose $3.46, or 6.2 per cent, to $59.49, and Immunex rallied $3.44, or 13.4 per cent, to $29.06.
Vivendi Universal said it would buy the entertainment arm of Barry Diller's USA Networks, a $10.3 billion deal that gives Vivendi a much-sought US distribution outlet for its film and TV assets. USA shares rose $1.20, or 5 per cent, to $25.02.
