US stocks rise after huge Shell deal
US stocks rose early Wednesday following news of Royal Dutch Shell's $70 billion takeover of BG Group as the market awaited the kickoff of earnings season.
About 30 minutes into trade, the Dow Jones Industrial Average was at 17,970.84, up 95.42 points (0.53 percent).
The broad-based S&P 500 rose 9.97 (0.48 percent) to 2,086.30, while the tech-rich Nasdaq Composite Index gained 36.37 (0.743 percent) at 4,946.60.
Five minutes into trade, the Dow Jones Industrial Average was at 17,924.79, up 49.37 points (0.28 percent) ©Spencer Platt (Getty/AFP/File)
Analysts said Shell's acquisition of BG could set off a wave of mergers in the energy industry spurred by the big drop in oil prices. Petroleum producers Marathon Oil (+0.6 percent) and Anadarko Petroleum (+1.2 percent) were among the companies gaining in opening trade.
Traders were also looking ahead to the 1800 GMT release of minutes of the March monetary policy meeting of the US Federal Reserve and to Alcoa earnings, which will be reported after the market closes.
Alcoa rose 2.5 percent.
Dow member Merck rose 0.8 percent after its new treatment for chronic hepatitis C won a "breakthrough therapy" designation from the US Food and Drug Administration. The designation is intended to expedite regulatory approval of promising drugs.
Halliburton advanced 0.2 percent after announcing it would sell its directional drilling business and some other assets to placate antitrust regulators in its takeover of rival oil services giant Baker Hughes.
Drugstore chain Rite Aid rose 0.5 percent as fourth-quarter earnings jumped to $1.8 billion from $55 million a year ago due to a $1.7 billion tax benefit.
Yoga attire maker Lululemon Athletica shot up 5.2 percent following an upgrade by Sterne Agee.
Lions Gate Entertainment, a movie and television program company, fell 7.1 percent to $31.30 after it announced that an offering of 10 million shares held by investment company MHR Fund would price at $32 per share.
Bond prices were mixed. The yield on the 10-year US Treasury held steady at 1.89 percent, while the 30-year rose to 2.53 percent from 2.52 percent Tuesday. Bond prices and yields move inversely.
jmb/pmh
