FILE PHOTO: The Nasdaq logo is displayed at the Nasdaq Market site in New York September 2, 2015. REUTERS/Brendan McDermid/File Photo
NEW YORK: The Nasdaq rose to hit a new intraday high on Monday, buoyed by the news of a potential US$103bil megadeal in the chip sector, while gains on the S&P and the Dow were capped by losses in the telecom sector.
Shares of Qualcomm rose 3.1% and were the biggest boost to the tech-heavy index after Broadcom offered to buy the smartphone chip supplier in what could be the biggest merger in the tech sector. Broadcom was off 0.3%.
“The fact that the deal is on the table is huge,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
“We have not seen much in the way of dealmaking this year. So this might jumpstart some of the dealmaking ahead of the tax policy changes.”
Shares of Sprint fell as much as 14.2% to a more-than-a-year low after the wireless provider and T-Mobile called off their planned merger.
The telecommunications sector led the decliners among the major S&P sectors, with a 3.04% fall. Verizon’s 4.7% fall weighed the most on the S&P and the Dow.
At 10:59am ET (1459 GMT), the Dow Jones Industrial Average was up 3.75 points, or 0.02%, at 23,542.94, and the S&P 500 was up 1.28 points, or 0.04%, at 2,589.12.
The Nasdaq Composite was up 16.04 points, or 0.24%, at 6,780.47.
Rising oil prices lifted the energy sector up 1%.
Crude oil prices rose to a more than two-year high after Saudi Arabia’s crown prince tightened his grip on power by arresting royals, ministers and investors, including billionaire Alwaleed bin Talal.
US companies continue to report their quarterly earnings.
With more than 400 of S&P 500 companies having reported, earnings for the third quarter are expected to have climbed 8%, compared to an expectation of a 5.9% rise at the start of October, according to Thomson Reuters I/B/E/S.
Investors are taking a breather after a busy week that included the unveiling of the Republican tax overhaul bill and the nomination of Federal Reserve governor Jerome Powell as the new Fed chair.
Michael Kors jumped 13.3% after the fashion accessories maker raised its 2017 revenue forecast. The stock was the biggest percentage gainer on the S&P.
Advanced Micro Devices rose 5.6% on a report that it plans to team up with Intel to form a personal computer chip unit. Intel was up 0.2%.
Advancing issues outnumbered decliners on the NYSE by 1,544 to 1,189. On the Nasdaq, 1,464 issues rose and 1,266 fell. - Reuters
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