USin further gains as M&Adeals rise

US stocks rose yesterday as reports of more merger activity added to a string of recent deals, suggesting investors still see value in the market after its run up of more than 50 per cent since March.<br /><br />Optimism about potential deals overshadowed concerns about trade friction between the United States and China after Washington imposed special duties on Chinese tire imports.<br /><br />Shares of power company <strong>AES</strong> rose 4.5 per cent after a report that China&rsquo;s sovereign wealth fund was in talks to take a stake in the firm. <strong>Sprint Nextel</strong> jumped 10.1 per cent amid reports Germany&rsquo;s <strong>Deutsche Telekom</strong> was considering a bid for its US rival. <br /><br />&ldquo;The M&amp;A activity is definitely starting to heat up. (The AES news) sparked interest across the whole utility sector,&rdquo; said Owen Fitzpatrick, head of the US Equity Group at Deutsche Bank Private Wealth Management.<br /><br />Analysts say M&amp;A activity could help the market stay on its recent uptrend. The benchmark Standard &amp; Poor&rsquo;s 500 index has gained 55 per cent since hitting 12-year lows in early March.<br /><br />US President Barack Obama, speaking in New York one year after Lehman Brothers&rsquo; collapse sent world markets into a tailspin, called on financial firms not to fight regulatory reform, but there was little market reaction.<br /><br />The Dow Jones industrial average ended up 21.39 points, or 0.22 per cent, at 9,626.80. The Standard &amp; Poor&rsquo;s 500 index was up 6.61 points, or 0.63 per cent, at 1,049.34. The Nasdaq Composite index finished 10.88 points higher, or 0.52 per cent, at 2,091.78.<br /><br />Banks, which benefit from M&amp;A activity, were among top gainers as well, with shares of JPMorgan Chase up 2.9 per cent at $43.75 and leading gains on the Dow.<br /><br />Shares of US tire makers also rose, including <strong>Goodyear Tire &amp; Rubber </strong>up 3 per cent to $17.78 and <strong>Cooper Tire &amp; Rubber </strong>up 7.1 per cent to $15.60.<br />On the Nasdaq, shares of <strong>Dendreon</strong> rose 15.1 per cent to $27.43 after analysts said the company, which is developing a vaccine for prostate cancer, is a takeover target.