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U.S. Equities Advance Amid Merger News, Optimism on Greece Talks

Monday, 22 Jun 2015 10:25 AM

(Bloomberg) -- U.S. stocks advanced, with the Standard & Poor’s 500 Index rising near a record, as Cigna Corp. and Williams Cos. jumped on merger news amid optimism over Greece debt talks.

Cigna climbed 6.1 percent after rejecting a $47 billion takeover bid from Anthem Inc, saying it was inadequate and not in the best interests of shareholders. Williams Cos. surged 22 percent after turning down a $48 billion stock-based takeover offer from pipeline magnate Kelcy Warren. Micron Technology Inc. slipped 1.1 percent after Goldman Sachs Group Inc. cut its rating on the shares to sell.

The S&P 500 rose 0.6 percent to 2,123.34 at 9:49 a.m. in New York, within 0.4 percent of its all-time high. The Dow Jones Industrial Average gained 119.04 points, or 0.7 percent, to 18,134.99. The Nasdaq Composite Index increased 0.6 percent.

“The outlook certainly looks more encouraging this morning,” said Patrick Spencer, equities vice-chairman at Robert W. Baird & Co. in London. “The possibility of a settlement in the Greek negotiations will stabilize the market.”

European Commission spokesman Martin Selmayr said in a Twitter posting that Greece’s new offer “was a good basis for progress.” Greek Prime Minister Alexis Tsipras will meet with representatives of his country’s main creditors, including European Central Bank President Mario Draghi and International Monetary Fund Managing Director Christine Lagarde, before an emergency euro-area summit in Brussels on Monday.

Tempering Optimism

With markets surging on speculation an accord was near, euro-area finance ministers closed ranks to douse hopes of an imminent deal as they arrived for the meeting in Brussels. Dutch Finance Minister Jeroen Dijsselbloem said it was “impossible to have a final assessment” of the Greek proposals since they had arrived so late.

The S&P 500 Friday posted its best weekly gain since April, amid signals from the Federal Reserve that the central bank won’t be raising rates quickly as officials hold out for more decisive evidence of an economic rebound.

Data today is forecast to show sales of existing homes rebounded in May, after a decline the previous month. Investors and the Fed will also assess reports this week on durable goods orders, first-quarter economic growth, personal income and spending and consumer sentiment.

“The consumer is two thirds of the economy, so they need housing to do well,” said Baird’s Spencer. “The housing number will continue to be reasonably buoyant and that will underpin the market.”

The Chicago Board Options Exchange Volatility Index fell 5.7 percent Monday to 13.17. The gauge, known as the VIX, rose 1.3 percent for last week.

To contact the reporter on this story: Roxana Zega in Zurich at rzega@bloomberg.net To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net John Shipman, Namitha Jagadeesh

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2015-25-22
Monday, 22 Jun 2015 10:25 AM
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