Stocks shook off a sluggish performance Wednesday to rally in the final hour of trading as Sprint’s acquisition of rival Nextel fueled investor confidence.
The late-day surge helped the major indexes pull out of the red in the wake of a new spike in oil prices and a further descent by the dollar.
The Dow Jones finished trading with a gain of 15 points to 10,691, while the Nasdaq inched up 3 points to 2,163. The S&P 500 rose 2 points to close at 1,206.
While the spike in oil prices itself may not have fazed traders, the drop in the dollar against the yen, the euro and the
British pound forced President Bush to express support for a strong dollar.
But the big news moving the markets today came from the telecom sector, where Sprint confirmed plans to acquire rival Nextel Communications. The $35 billion merger would create the third-largest cell-phone company in the U.S., trailing only Cingular Wireless and Verizon Wireless.
Shares of both companies took a hit following the news, with Sprint falling $1.08, or 4.3 percent, to close at $24.02 and Nextel
dropping $1.29, or 4.3 percent, to $28.70.
In other major corporate news, Time Warner reached a $510 million settlement with the U.S. Justice Department and Securities and Exchange Commission regarding allegations of accounting fraud at the entertainment conglomerate’s America Online unit. Time Warner shares finished even at $19.38, but not before surging to $19.90 in midmorning trading, their highest price in more than 30 months.
ADC Telecommunications soared more than 10 percent to $2.73 after the broadband network equipment player reported fourth-quarter earnings of $59.7 million, or 7 cents per share, a huge jump over last year’s Q4 earnings of $9.4 million, or 2 cents a share.
Loudeye skyrocketed 40 cents, or 19 percent, to $2.49 after the digital media company inked a multiyear contract with the MTV network, owned by Viacom.