The Clinton Herald, Clinton, Iowa

September 10, 2013

Stocks rise on mergers, homebuilder outlook

JOSHUA FREED AP Business Writer
The Clinton Herald

---- — The stock market got a boost on Monday from mergers, homes, and phones.

Two big deals suggested growing confidence in the economy: Luxury retailer Neiman Marcus was sold for $6 billion, and Koch Industries bought electronics component maker Molex for $7.2 billion.

Apple rose. It’s expected to announce a new iPhone today.

Homebuilding stocks were some of the biggest gainers in the Standard & Poor’s 500 index after Hovnavian Enterprises said home prices are rising and its backlog jumped almost 27 percent from a year earlier.

Hovnanian rose 13 cents, or 2.6 percent, to $5.17. PulteGroup, D.R. Horton and Lennar also gained. Homebuilder MDC Holdings rose $1.90, or 6.9 percent, to $29.55 after an upgrade from a Citi analyst.

Homebuilding stocks have had a volatile year. Investors have been bullish because the housing market is recovering, but worried that rising interest rates make mortgages more expensive for home buyers.

Shortly before the closing bell, the Dow Jones industrial average was up 145 points, or 1 percent, to 15,068. The Dow hit an all-time high of 15,658 on Aug. 2. But worries about Syria and rising interest rates pushed stocks down since then. The last time the Dow closed above 15,000 was Aug. 23.

The S&P 500 index rose 16 points, or 1 percent, to 1,671. The Nasdaq composite rose 46 points, or 1.3 percent, to 3,706.

All 10 industry groups in the S&P 500 rose. The index rose for the fifth day in a row, the longest since eight days of gains in July.

Two things about the Koch-Molex deal grabbed investors’ attention: Its components show up in a wide variety of products, including housing and autos, so Koch’s interest suggests that it sees broad economic improvement. Also, Koch is paying a large premium for Molex.