Stocks Are Higher on More Takeover News

By MADLEN READ

Wall Street advanced Wednesday, driving the Dow Jones industrials above 13,600 for the first time on another wave of takeover activity and an increase in oil and gasoline stockpiles.

Alcan Inc. (AL) rebuffed a $27.6 billion hostile bid by aluminum competitor Alcoa Inc. (AA), and Canadian media reported that Australian mining giant BHP Billiton Ltd. might make its own offer.

The bidding battle rumors came amid a New York Post report that EMI Group Chief Executive Jim Fifield might be in the final stages of planning an offer to buy the music company. And late Tuesday, Payless ShoeSource Inc. (PSS) said it will buy competing shoe store chain Stride Rite for about $800 million, while real estate investment trust Crescent Real Estate Equities Co. (CEI) said it will be bought by another real estate investment firm, Morgan Stanley Real Estate, for about $2.34 billion.

Investors appear to be unperturbed by the slow economy and focused more on corporate America's strength. About $2.3 trillion worth of deals have been announced so far this year, according to financial data provider Dealogic, and the tally is on track to beat last year's record $4 trillion.

Robust earnings reports from companies including Target Corp. (TGT) and Medtronic Inc. (MDT) and a solid rebound in U.S. gasoline inventories also encouraged investors to resume their buying. The Energy Department said gas inventories rose by 1.5 million barrels in the latest week, nearly twice the amount the market expected.

In mid-morning trading, the Dow Jones industrial average rose 60.46, or 0.45 percent, to 13,600.41.

Broader stock indicators were also higher. The Standard & Poor's 500 index advanced 7.72, or 0.51 percent, to 1,531.84, and the Nasdaq composite index gained 11.72, or 0.45 percent, to 2,599.74. [via]