US stocks push higher on merger news

Wall Street shook off concerns about inflation and pushed stocks higher today as a spate of merger news encouraged investors to return to the market. Rising oil prices, however, kept the gains in check.

With a deal announced in the energy sector and talks among online brokerages and airlines, companies’ appetites for mergers and acquisitions remained healthy, showing corporate America’s confidence in the economy.

Investors also seemed to have more confidence in the Federal Reserve’s ability to balance economic growth with rising prices, keeping both inflation and the spectre of an economic slowdown in check. And finally, with the major indexes well off their 2005 highs, investors saw a chance to find bargains.

“I think you’ve got a sense of optimism out there we haven’t seen in awhile,” said Bill Groenveld, head trader for vFinance Investments. “It’s not enough to make a big push higher, but just enough to start a slow, sustained climb. I think there’s faith in the Fed to manage things, and earnings growth has been good. So you’re seeing folks creep back into the market.”

According to preliminary calculations, the Dow Jones industrial average rose 38.94, or 0.38%, to 10,384.34.

Broader stock indicators also made gains. The Standard & Poor’s 500 index added 7.49, or 0.64%, to 1,178.84, and the Nasdaq composite index gained 12.32, or 0.63% to 1,979.67.