Wall St treads water despite surge in M&A

THE S&P 500 eked out a small gain for a third straight session yesterday, helped by a flurry of merger activity, though investors see no catalysts to lift the market further with major averages near multi-year highs.

The market’s slowed advance took the S&P 500 to its highest intraday level since November 2007 on Wednesday. While the index notched its third straight day of gains, none was more than 0.2 per cent.

Shares of H.J. Heinz jumped 20 per ent to $72.50 after it said Warren Buffett’s Berkshire Hathaway and 3G Capital will buy the food company for $72.50 a share, or $28bn including debt. Berkshire’s class B shares rose 1.3 per cent to $99.21.

Also supporting the market was data showing the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. The CBOE Volatility index fell 2.4 per cent, dropping to 12.67.

Stocks fell earlier after a report the Eurozone’s gross domestic product contracted by the steepest amount since the first quarter of 2009. In addition, Japan’s GDP shrank 0.1 per cent in the fourth quarter, crushing expectations of a modest return to growth.

The Dow Jones industrial average was down 9.52 points, or 0.07 per cent, at 13,973.39. The Standard & Poor’s 500 Index was up 1.05 points, or 0.07 per cent, at 1,521.38. The Nasdaq Composite Index was up 1.78 points, or 0.06 per cent, at 3,198.66.

Constellation Brands soared 37 per cent to $43.75 after AB InBev’s deal to take over Mexican brewer Grupo Modelo was revised to grant Constellation perpetual rights to distribute Corona and other Modelo brands in the United States. US shares of AB InBev gained 5.1 per cent to $92.77.