Wall St rises on tech bid; best week since March '03
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By Ellis MnyanduNEW YORK (Reuters) - Stocks rose on Friday, capping Wall Street's best week in almost five years, after Microsoft Corp's $44.6 billion bid for Yahoo Inc overshadowed news that employers cut payrolls for the first time since 2003.Microsoft, in its biggest-ever takeover deal, offered a 62 percent premium for the Internet media company, boosting optimism about share valuations and buoying the overall market even as shrinking payrolls in January provided the clearest sign yet that the economy is close to recession.Yahoo shares led advancers on both the S&P 500 and the Nasdaq, with a gain of nearly 48 percent, pulling its shares closer to Microsoft's $31-per-share offer.Yahoo shares ended at $28.38 on the Nasdaq.Shares of metal producers and miners contributed to the Wall Street rally after China teamed up with Alcoa to buy a $14 billion stake in Rio Tinto , the world's No. 2 miner by market value. The S&P materials index <.GSPM> rose 2.21 percent."It seems to me the real driving news was the unexpected Microsoft bid for Yahoo. In general, it seemed to spark a little enthusiasm on the back of yesterday's nice rally," said Eric Kuby, chief investment officer at NorthStar Investment Management Corp in Chicago.The proposed takeover "shows that maybe equity prices just got too low and now you are seeing a little bit of courage from people who have been on the sidelines," he added.For the regular session, the Dow Jones industrial average <.DJI> finished up 92.83 points, or 0.73 percent, to 12,743.19. The Standard & Poor's 500 Index <.SPX> gained 16.87 points, or 1.22 percent, to 1,395.42. The Nasdaq Composite Index <.IXIC>shot up 23.50 points, or 0.98 percent, to 2,413.36.In a week during which the Federal Reserve slashed benchmark U.S. short-term interest rates, the Dow and the S&P 500 notched their best weekly advances in almost five years, gaining 4.4 percent and 4.9 percent, respectively.The Nasdaq posted its best one-week jump in nearly 18 months, finishing up 3.8 percent in the same period.Tech standouts included shares of chip maker Intel Corp , up 3.2 percent at $21.76 on the New York Stock Exchange, and those of International Business Machines Corp , the technology services company, up 1.6 percent at $109.08.While the unexpected weakness in U.S. January payrolls added to concerns that the economy may be teetering on the edge of a recession, analysts said Microsoft's bid for Yahoo suggested blue-chip stocks had become cheap.But shares of Microsoft finished the session a top drag on the Dow and the S&P 500, down 6.6 percent at $30.44 in heavy trade. In addition, shares of Web search leader Google Inc , which is seen as the target of Microsoft's move, shed 8.6 percent to $515.90.Elsewhere, shares of Alcoa led stocks of metals companies to close up 3.6 percent at $34.28 on the NYSE.A report showing a modest revival in manufacturing at the start of 2008 underpinned gains among shares of big manufacturers, including 3M Co and General Electric Co .3M shares were the Dow's second top advancer behind IBM, finishing up 1.96 percent at $81.21 on the NYSE. Shares of GE were the S&P's second top advancer behind Yahoo, ending with a gain of 2.12 percent at $36.16.Shares of oil services company Schlumberger Ltd jumped 3.74 percent to $78.28 as it rode on the coattails of big profits posted by oil majors Exxon Mobil Corp and Chevron Corp .Trading was moderate on the New York Stock Exchange, with about 1.79 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq about 3.10 billion shares traded, topping last year's daily average of 2.17 billion.Advancing stocks outnumbered decliners by a ratio of about 7 to 2 on the NYSE and by 9 to 4 on Nasdaq.(Reporting by Ellis Mnyandu; editing by Gary Crosse)
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