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Dow Up 34, Nasdaq Up 2 on Teva Merger

Posted on: Friday, 31 October 2003, 06:00 CST

Investors bid stock prices higher on Friday, discounting a government report that consumer spending had cooled in September after a sizzling summer.

Trading got a boost at midmorning when the Israeli company Teva Pharmaceutical Industries Ltd. announced it would acquire Sicor Inc. of Irvine, Calif., for $3.4 billion in cash and stock.

In late morning trading, the Dow Jones industrial average was up 33.55, or 0.34 percent, at 9,820.16.

The broader market also rose. The Nasdaq composite index advanced 2.19, or 0.11 percent, to 1,934.88, while the Standard & Poor's 500 index rose 4.31, or 0.41 percent, to 1,051.25.

Before trading began, the government reported that consumers kept a tighter grip on their wallets in September, trimming spending by 0.3 percent. Analysts had expected a 0.1 percent drop. Consumer spending had risen 1.1 percent in August an 1 percent in July.

Still, Americans' incomes rose 0.3 percent in September for the third month in a row, slightly better than the 0.2 percent increase analysts had expected.

Heavy consumer spending in the summer months helped boost the nation's economic growth to 7.2 percent in the third quarter, the strongest performance in nearly 20 years, according to a government report released Thursday.

Nasdaq share prices weakened at midmorning, then revived after the Israeli company Teva Pharmaceutical Industries said it would acquire Sicor. Teva fell $1.48 to $56.23, while Sicor rose $1.61 to $26.58.

A spate of merger news, including the announcement Monday of Bank of America Corp.'s planned purchase of FleetBoston Financial Inc., has given investors more confidence in the business climate over the past few sessions.

But Barry Berman, the head trader for Robert W. Baird & Co. in Milwaukee, said there was "a kind of a tug of war" in the markets.

"There's been a big run in the market since March, and a lot of people feel it's overbought," Berman said. "On the other hand, the economic report yesterday was good news ... so people are looking for a stronger economy in the future."

Companies reporting higher earnings were rewarded by investors.

Oil companies Anadarko Petroleum and ChevronTexaco Corp. reported third-quarter earnings ahead of analysts' estimates. In early trading, Anadarko shares were up 30 cents at $43.15, while ChevronTexaco advanced $1.59, or more than 2 percent, to $73.35.

Health insurer Cigna Corp. also reported better-than-expected profits and projected that net earnings from health care would rise 10 percent this year from last. Its shares were up $8.61, or nearly 18 percent, to $56.58.

And agribusiness giant Archer Daniels Midland Co. said earnings rose about 40 percent from a year ago. Its share rose 52 cents, or nearly 4 percent, to $14.09.

The Russell 2000 index, which tracks smaller company stocks, was up 0.35, or 0.07 percent, to 530.72.

Advancing issues outnumbered declining issues by about 3-to-2 on the New York Stock Exchange, where volume came to 410.1 million shares on Friday compared with 486.2 million at the same time on Thursday.

Overseas, Japan's Nikkei stock average closed Friday down 1.27 percent. In Europe, France's CAC-40 was down 0.63 percent, Britain's FTSE 100 was off 0.48 percent while Germany's DAX index was up 0.03 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

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