tocks closed slightly higher yesterday, supported by a flurry of merger news, but turmoil in Iraq drove oil prices up and kept trading choppy.
Energy stocks were the day’s winners, with the S&P energy index up 0.5 per cent. The S&P financial sector index was the biggest decliner, down 0.4 per cent.
The United States said it is considering air strikes and cooperation with its arch-enemy, Iran, to help the Iraqi government fend off an Islamist insurgency.
“Iraq is an excuse at this point for investors to sell at these levels. As soon as there is some selling, buyers come in almost immediately, and that is why the market is choppy like today,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
“It’s a further indication that this is not a market that will just plunge on geopolitical issues.”
On the merger front, medical device maker Medtronic agreed to buy Dublin-based Covidien for $42.9bn and shift its executive headquarters to Ireland. Covidien’s stock shot up 20.5 per cent to $86.75 to make it the S&P 500’s biggest percentage gainer.
The Dow Jones industrial average rose 5.27 points or 0.03 per cent, to end at 16,781.01. The S&P 500 gained 1.62 points or 0.08 per cent, to 1,937.78. The Nasdaq Composite added 10.45 points or 0.24 per cent, to 4,321.11.
Economic data was positive. Manufacturing output rose in May and factory activity in New York state accelerated sharply this month, buoying hopes for strong economic growth this quarter.