(Bloomberg) — U.S. stocks rose amid corporate deals after the Standard & Poor’s 500 Index tumbled the most in two months on Friday.
Macerich Co. climbed 5.8 percent after Simon Property Group Inc. offered to buy the company in a cash-and-stock transaction valued at about $22.4 billion, including debt. RTI International Metals Inc. soared 40 percent after Alcoa Inc. agreed to acquire it for about $1.26 billion to expand in the aerospace industry.
The S&P 500 rose 0.3 percent to 2,078.15 at 10:51 a.m. in New York. The Dow Jones Industrial Average advanced 107.73 points, or 0.6 percent, to 17,964.51 as equities enter the seventh year of a bull run.
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“The Monday morning news is typically deal related,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said in a telephone interview. “Two or three today that are somewhat noteworthy. That’s always encouraging — that companies are finding value in other companies. There’s a little better feeling about the world and Europe as far as economic growth and stability.”
Concern the Federal Reserve may start raising interest rates this year amid a strengthening economy has dragged equities lower. The S&P 500 fell 1.6 percent last week, the most since January, as data showed the jobless rate reached the central bank’s range for what it considers full employment. Policy makers next meet on March 17-18.
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The S&P 500 has advanced 0.6 percent this year, after rallying 11 percent in 2014 and 30 percent in 2013. The benchmark measure is trailing all but two of 24 developed markets this year, data compiled by Bloomberg show.
The index has more than tripled from its bear-market low on March 9, 2009, buoyed by three rounds of Federal Reserve bond-buying and low interest rates. The gauge hasn’t had a 10 percent drop since 2011, posting more than 50 closes at all-time highs in the past year.
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The current run, lasting almost 2,200 days, is about two months away from overtaking the 1974-1980 bull market as the third-longest since 1929. After the S&P 500, Dow Jones Industrial Average and Russell 2000 Index all hit records on March 2, and the Nasdaq Composite Index climbed above 5,000 for the first time since 2000.
At 18.6 times earnings, the S&P 500’s valuation is near a five-year high and compares with an average of 16.9 since 1936, data compiled by Bloomberg and S&P Dow Jones Indices show.
Warnings that stocks are in a bubble and that breadth is narrowing are signs that the thing that really kills bull markets, euphoria, has yet to surface, Laszlo Birinyi, the president of Birinyi Associates Inc. in Westport, Connecticut, said in a phone interview.
“We still see continuous negativity,” Birinyi said. “A lot of people have missed and they’ve been wrong. It’s hard to one day turn around and say ‘I was wrong.’ Ultimately, the market continues to surprise on the upside.”
Reports this week may show an improvement in U.S. retail sales, consumer sentiment and industrial production, and a drop in jobless claims, economists forecast.
Nine of the S&P 500’s main groups advanced, led by energy and industrials. Energy companies fell 2.9 percent last week while industrials lost 1.9 percent, the worst week for both since January.
Macerich climbed 5.8 percent after Simon Property, the largest U.S. mall owner, offered to buy the company in a cash-and-stock transaction valued at about $22.4 billion, including debt. Simon added 0.5 percent.
RTI International soared 40 percent to its highest level in almost four years after Alcoa agreed to buy the company in an all-stock transaction valued at about $1.26 billion. Alcoa fell 4.6 percent to its lowest since June.
General Motors Co. rose 2.9 percent after announcing a $5 billion share buyback program on Monday. Activist investor Harry J. Wilson will give up his request for a board seat after reaching an agreement with the automaker.
Whiting Petroleum Corp. jumped 13 percent as people familiar with the matter said the oil producer has hired a bank to pursue a potential sale.
Apple Inc. climbed 1 percent as investors await details of its smartwatch that starts shipping to stores in April. Chief Executive Officer Tim Cook will answer questions on the price range, battery life and dates of global distribution of the Apple Watch, at an event starting 10 a.m. in San Francisco.
To contact the editors responsible for this story: Cecile Vannucci at email@example.com John Shipman, Namitha Jagadeesh
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