Stocks Edge Higher in Early Trade
NEW YORK (AP) -- U.S. stock indexes are edging higher Monday, led by energy companies. High-dividend stocks are also higher as bond yields decline, but industrial companies are falling. Yields had climbed to their highest level in more than three years last week. French pharmaceutical company Sanofi and biotech drugmaker Celgene both announced large acquisitions. Investors aren't fazed by the federal government shutdown as it entered its third day.
KEEPING SCORE: The Standard & Poor's 500 index picked up 5 points, or 0.2 percent, to 2,815 as of 10:10 a.m. Eastern time after closing at another all-time high on Friday. The Dow Jones industrial average rose 20 points to 26,094. The Nasdaq composite added 32 points, or 0.4 percent, to 7,368. The Russell 2000 index of smaller-company stocks was little changed at 1,597.
HEALTH CARE DEALS: Sanofi said it will buy hemophilia treatment maker Bioverativ for $105 a share, a deal the companies valued at $11.6 billion. Bioverativ makes Eloctate and Alprolix, which treat two different types of hemophilia. It's part of Sanofi's growing focus on rare diseases, which can command high prices at a time generic medications for more common ailments are falling.
Bioverativ jumped $39.80, or 62.1 percent, to $103.91 while Sanofi lost $1.84, or 4.1 percent, to $42.76.
Meanwhile Celgene will pay $87 a share, or $9 billion, for Juno Therapeutics. Juno is one of several companies developing CAR-T cancer therapies, which genetically engineer patients' blood cells into "living drugs" that fight cancer. The stock surged last week on reports Celgene might buy the company. On Monday it rose $18.28, or 27 percent, to $86.09 while Celgene declined $1.07, or 1 percent, to $101.59.
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SHOPPING FOR INSURANCE: Insurer AIG is buying Validus, a provider of reinsurance, primary insurance, and asset management services, for $5.56 billion, or $68 a share. Validus gained $20.74, or 44.4 percent, to $67.46 and AIG slid 97 cents, or 1.6 percent, to $60.58.
LAGGARDS: Industrial companies were down in early trading. Boeing fell $2.58 to $335.15 and 3M shed $2.52, or 1 percent, to $245.66.
U.S. SHUTDOWN: The U.S. government officially shut down Saturday morning after lawmakers couldn't agree on funding measures. The threat of a shutdown has loomed for months, but hasn't troubled investors. Experts say it's unlikely to have much effect on the market or the economy unless it persists for a long time, as investors are encouraged by economic growth around the world and the corporate tax cut signed into law last month.
COPY THAT: Billionaire investor Carl Icahn is calling for the removal of Xerox CEO Jeffrey Jacobson as the copier company reportedly seeks a deal with camera company Fujifilm. The Wall Street Journal reported last week that the two companies are in talks for a potential deal. Icahn, along with shareholder Darwin Deason, said Monday they don't trust Jacobson to lead the potential negotiations. Combined, they own 15 percent of Xerox and want to put four new members on the board of directors.
"He is neither qualified nor capable of successfully running this company, let alone negotiating a major strategic transaction that will do more than save his own job," Icahn and Darwin wrote in a letter to Xerox's board. The stock rose 77 cents, or 2.4 percent, to $32.57.
ENERGY: Halliburton climbed after the oil and gas drilling services company posted a bigger adjusted profit and greater revenue than analysts expected. Its stock advanced $1.93, or 3.7 percent, to $54.94. Competitor Schlumberger, which reported better-than-expected results Friday, gained $2.09, or 2.7 percent, to $78.51. That helped energy companies move slightly higher.
Benchmark U.S. crude rose 13 cents to $63.50 per barrel in New York. Brent crude, used to price international oils, added 19 cents to $68.80 a barrel in London.
BONDS: Bond prices rose, and yields were slightly lower after a run of big gains. The yield on the 10-year Treasury note fell to 2.64 percent from 2.66 percent late Friday, a three-year high. With yields lower, investors turned to stocks that pay big dividends, including phone and utility companies. Their large dividend payments make them an alternative to bonds for investors seeking income, and they tend to do better when yields fall.
CURRENCIES: The dollar rose to 110.86 yen from 110.60 yen from 110.98 yen. The euro edged up to $1.2242 from $1.2234.
OVERSEAS: The French CAC 40 added 0.2 percent and Germany's DAX edged up 0.1 percent. In Britain the FTSE 100 lost 0.1 percent. Tokyo's Nikkei 225 rose less than 0.1 percent and Hong Kong's Hang Seng advanced 0.4 percent. The Kospi in South Korea lost 0.7 percent.
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