M&A food fight boosts US stocks
This July 15, 2013 file photo shows the New York Stock Exchange in New York. The battle between two giant meat processors over hot dog maker Hillshire Brands helped boost Wall Street and lifted the S&P 500 to a new record on Thursday, May 29, 2014. AP PHOTO/MARK LENNIHAN
NEW YORK—The battle between two giant meat processors over hot dog maker Hillshire Brands helped boost Wall Street and lifted the S&P 500 to a new record on Thursday.
Investors shrugged off the government’s report that the US economy contracted a surprising 1.0 percent in the first quarter as economists said a rebound was already firmly under way.
The Dow Jones Industrial Average finished up 65.56 points (0.39 percent) at 16,698.74.
The broad-based S&P 500 added 10.25 (0.54 percent) to 1,920.03, a new closing high for the index.
The tech-rich Nasdaq Composite Index rose 22.87 (0.54 percent) to 4,247.95.
Hillshire Brands jumped 17.7 percent to $52.76 as Tyson Foods made an offer valued at $6.8 billion for the company, topping the $6.4 billion bid made Tuesday by Pilgrim’s Pride, a subsidiary of Brazilian meat titan JBS.
Hillshire’s closing price was well above Tyson’s $50 a share offer, suggesting investors were anticipating a bidding war between the two suitors.
A sharp cut to its earnings forecasts sent shares of the huge US mall owner Simon Property Group tumbling 6.1 percent, with several analysts lowering their own targets for the company.
With US malls facing high vacancy rates—hit in part by online merchandising—Simon said it expects 2014 net income to be as low as $4.21 a share, cut by 34 cents from the prior low estimate.
Twitter gained 0.7 percent in heavy trade. Apple added 1.8 percent as it sealed a $3 billion deal to buy Beats Music, carving itself a space in the music streaming business.
Listed music streaming competitors benefited from the high valuation for Beats: Sirius gained 0.8 percent and Pandora 0.5 percent.
Bond prices reversed recent gains and fell, after yields dropped to one-year lows in early trade. The yield on the 10-year US Treasury rose to 2.46 percent from 2.44 percent late Wednesday, while the 30-year pushed to 3.33 percent from 3.29 percent. Bond prices and yields move inversely.
