Stocks up on possible GM-Nissan alliance By CHRISTOPHER WANG, AP Business Writer
48 minutes ago
NEW YORK - Wall Street made a moderate advance Monday as mild economic data and news of a possible alliance between General Motors Corp. and Nissan Motor Co. energized investors in light pre-holiday trading.
Stocks got an early boost after Nissan said it decided to begin talks of GM joining an existing partnership between the Japanese automaker and Renault SA. The news lifted shares of GM, which also posts its June sales later in the session.
The Institute for Supply Management's manufacturing index for June slipped 0.6 points to 53.8, feeding optimism that a slowing economy would keep the Federal Reserve from raising interest rates much higher. A dip in the ISM report's inflation component reinforced those hopes and offset an uptick in oil prices.
But with many traders out of the office ahead of Independence Day, light volume was expected to keep stocks from making a sharp move in either direction. The markets close at 1 p.m. Eastern Time and will be closed on Tuesday.
In midmorning trading, the Dow Jones industrial average advanced 56.19, or 0.5 percent, to 11,206.41. On Friday, the Dow ended the second quarter off 40 points as money managers locked in profits from its 217-point rally Thursday.
Broader stock indicators were also higher. The Standard & Poor's 500 index was up 4.93, or 0.39 percent, at 1,275.13, and the Nasdaq composite index gained 7.01, or 0.32 percent, to 2,179.10.
Bonds steadied after last week's rally, with the yield on the 10-year Treasury note unchanged at 5.14 percent from late Friday. The U.S. dollar advanced on the Japanese yen, and gold prices lingered near $615 per ounce.
Crude futures approached $74 amid concerns about heightened gasoline demand during the busy summer driving season. A barrel of light crude rose 43 cents to $73.94 on the New York Mercantile Exchange.
Media reports have said Nissan and Renault could buy as much as 20 percent of GM's stock after a major shareholder proposed the struggling automaker join the Nissan-Renault alliance. GM added 42 cents to $30.21 and Nissan inched up 2 cents to $22.
Nortel Networks Corp. surged after Jefferies & Co. upgraded the troubled telecommunications equipment company, citing a low share price and changes being implemented following an accounting scandal two years ago. Nortel rose 11 cents to $2.35.
Overseas, Japan's Nikkei stock average climbed 0.43 percent in its third straight day of gains. In afternoon trading, Britain's FTSE 100 rose 0.59 percent, Germany's DAX index added 0.35 percent and France's CAC-40 was higher by 0.17 percent.
Advancing issues led decliners by 9 to 5 on the New York Stock Exchange, where volume of 176.3 million shares lagged the 199.5 million shares changing hands at the same point Friday.
The Russell 2000 index of smaller companies advanced 1.02, or 0.14 percent, to 725.69.
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