* Shire to accept Abbvie takeover offer
* Citigroup up after earnings, settlement
* Indexes up: Dow 0.75 pct, SP 0.55 pct, Nasdaq 0.68 pct
(Updates to midday)
NEW YORK, July 14 (Reuters) – U.S. stocks rose on Monday,
sparked by the latest flurry of merger activity and earnings
from Citigroup, putting the SP 500 on pace to climb for a
second straight session.
London-listed drugmaker Shire Plc said it was ready
to recommend to agree to an increased 31 billion pounds ($53
billion) takeover offer from Abbvie Inc, ending a
long-running courtship largely motivated by tax rates.
U.S.-listed shares of Shire rose 1.4 percent to $252.48
while Abbvie shed 1.2 percent to $54.30.
Generic drugmaker Mylan Inc said it would buy Abbott
Laboratories’ specialty and branded generics business
outside the United States in an all-stock transaction valued at
about $5.3 billion. Mylan shares advanced 2.7 percent to $51.55
before the opening bell. Abbott shares rose 1 percent to $41.72.
Citigroup Inc shares rose 3.4 percent to $48.59 as one
of the top boosts to the SP 500 after it posted second-quarter
earnings and agreed to pay $7 billion to settle a U.S.
government investigation into mortgage-backed securities. The
SP financial index gained 0.8 percent.
Goldman Sachs analyst David Kostin raised his 2014 target
for the SP 500 to 2,050 from 1,900, citing expectations that
yields on the 10-year Treasury note will be around 3 percent and
will continue to push investors into stocks as they search for
higher returns.
“We have Citi earnings coming out positively, that’s giving
us a little spark. Continued MA would more than likely propel
sentiment, and we got Goldman raising their SP target for
year-end,” said Andre Bakhos, managing director at Janlyn
Capital LLC in Bernardsville, New Jersey.
“A confluence of events has set us up for continued upside.”
Earnings season will pick up speed this week, with 59 SP
500 components scheduled to report. SP 500 profits are
seen growing 6.2 percent in the second quarter, according to
Thomson Reuters data, down from the 8.4 percent growth forecast
at the start of April. Revenue is seen up 3.1 percent.
In order to justify current stock prices, analysts are
looking to earnings to confirm the economy recovered in the
second quarter from the impact of a harsh winter.
The Dow Jones industrial average rose 126.24 points
or 0.75 percent, to 17,070.05, the SP 500 gained 10.73
points or 0.55 percent, to 1,978.3 and the Nasdaq Composite
added 30.18 points or 0.68 percent, to 4,445.67.
The Dow hit a record intraday high of 17,088.43.
Engineering design firm AECOM Technology Corp on
Sunday said it would pay about $4 billion to acquire engineering
and construction services firm URS Corp. URS shares
jumped 10 percent to $57.21 and AECOM gained 5.9 percent to
$33.63.
(Additional reporting by Rodrigo Campos; Editing by Chizu
Nomiyama and Nick Zieminski)