NEW YORK -- News of a handful of corporate deals sent some stocks jumping Monday, and Family Dollar climbed after news that investor Carl Icahn has taken a stake in the company.
With no major economic reports to drive the market, U.S. indexes made slight gains in the morning then slouched back toward the break-even mark in the afternoon. The Standard & Poor's 500 index still managed to close at another all-time high, rising 1.83 points, or less than 0.1 percent, to 1,951.27.
The Dow Jones industrial average edged up 18.82 points, or 0.1 percent, to 16,943.10, while the Nasdaq composite index gained 14.84 points, or 0.3 percent, to 4,336.24.
The S&P 500 has been on a steady climb for three weeks, lifting the benchmark for most investment funds by 4 percent.
Judging by some measures, that sudden success makes it look like the S&P 500 has moved "too far, too fast," said Joe Bell, senior equity analyst at Schaeffer's Investment Research.
But there are still plenty of traders making bets against the market. People also have taken billions out of mutual funds that invest in U.S. stocks week after week, according to the Investment Company Institute.
"We don't think there's an overwhelming amount of optimism right now," Bell said.
In corporate deal news, Hillshire Brands rose $3.14, or 5 percent, to $62.06 after Tyson Foods emerged as the winner in a bidding war for the meat processor.
Merck announced a deal to buy Idenix Pharmaceuticals for $3.85 billion, an acquisition that would give the pharmaceutical giant Idenix's array of treatments for hepatitis C. Idenix shares soared $16.56, or 229 percent, to $23.79.
Apple's stock rose $1.48 to $93.70. That's after closing at $645.57 on Friday. The difference reflects Apple's 7-for-1 stock split, which gave every Apple stockholder six additional shares for every share he owned.
In a disclosure filed to regulators late Friday, Icahn said he and his affiliates have picked up a 9 percent stake in Family Dollar, a discount store, and plan to look for changes to increase the company's value. Family Dollar's stock jumped $8.09, or 13 percent, to $68.62.
Some investment analysts have been warning that the market is past due for a 10 percent drop, known as a "correction," because there hasn't been one since August 2011. Since World War II, corrections typically hit every 18 months on average, according to S&P Capital IQ.
Jim Paulsen, the chief investment strategist at Wells Capital Management, said he wouldn't rule one out this year. But such a downturn requires the right environment, one in which investors get too greedy for their own good. Right now, he said, there's too much caution.
"It's going to take some time before people get so greedy that they're going to do stupid stuff and blow us up," Paulsen said.
About 5.3 billion shares changed hands on U.S. exchanges Monday, 15 percent below the three-month average.
"There's a fair amount of skepticism over if we are at peak valuations," said Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors' U.S. Intermediary Business. State Street Corp. oversees $2.4 trillion in assets. "My view is the Goldilocks economy is back -- not too cold, not too hot, but just right. What we're starting to see is companies starting to do capital expenditures and [mergers] to invest in their businesses."
In the market for U.S. government bonds, the yield on the 10-year Treasury edged up to 2.6 percent from 2.59 percent late Friday. Yields rise when bond prices fall. The price of oil rose $1.75 to $104.41 a barrel.
Information for this article was contributed by Oliver Renick and Callie Bost of Bloomberg News.
Business on 06/10/2014