New York Report: Markets riding fresh peaks as fear index lifts


Dow and S&P 500 ended at record highs again yesterday as more deal news raised enthusiasm for stocks, though Wall Street’s fear gauge advanced.

It was a fourth straight record closing high for the S&P 500 and a third for the Dow. The gains, though, have been moderate in most recent sessions and volume lighter than average.

The CBOE Volatility Index rebounded after falling on Friday to its lowest level since February 2007. Wall Street's “fear gauge” rose 3.9 per cent to end at 11.15. The VIX remains at nearly half of its historical average, which some analysts worry is a signal that the market is not fully accounting for issues that could derail the rally.

Yesterday’s merger activity prompted investors to buy some stocks. Merck & Co said it has agreed to buy Idenix Pharmaceuticals in a deal valued at about $3.85bn.

The Dow Jones industrial average rose 18.82 points or 0.11 per cent, to 16,943.10. The S&P 500 gained 1.83 points or 0.09 per cent, to 1,951.27. The Nasdaq Composite added 14.84 points or 0.34 per cent, to 4,336.24.

The Dow set an intraday record high at 16,970.17, while the S&P 500 touched an all-time intraday high at 1,955.55.

In other deal news, Analog Devices said it would buy Hittite Microwave in a deal valued at $2bn.

Tyson Foods prevailed over Pilgrim’s Pride in a bidding war over Hillshire Brands, offering to buy the maker of Jimmy Dean sausages for $8.55bn, including debt.