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By Alexandra Twin & Grace Wong
CNNMoney.com
Friday, May 25th, 2007
NEW YORK (CNNMoney.com) -- Deal news helped stocks rebound Friday, although trading volume was thin ahead of the holiday weekend.
The Dow Jones industrial average (up 49.00 to 13,490.13, Charts) added 0.4 percent with less than an hour left in the session and stood not far below its all-time high reached earlier this week. The tech-fueled Nasdaq composite (up 20.14 to 2,558.06, Charts) climbed 0.8 percent and was close to a six-year high.
The S&P 500 index (up 7.22 to 1,514.73, Charts) gained 0.5 percent and approached its all-time closing high of 1,527.46. That high was hit on March 24, 2000, near the end of the last big bull run that was sparked by the 1990s tech boom.
Merger activity provided momentum for stocks. Coca-Cola agreed to buy vitamin water maker Glaceau for $4.1 billion, sending Coke (up $0.64 to $51.88, Charts, Fortune 500) shares up a little more than 1 percent.
Nasdaq Stock Market said it is buying Nordic exchange group OMX AB in a $3.7 billion cash-and-stock deal that will give the U.S. exchange a better toehold in Europe, after two failed attempts to buy the London Stock Exchange Group. Nasdaq (down $1.20 to $32.78, Charts) shares fell nearly 4 percent.
Investors cheered the deals, but trading volume was light ahead of the long weekend. U.S. financial markets will be closed on Monday for Memorial Day.
"The market is going out on a positive note before the long weekend, but as far as next Tuesday is concerned, anything can happen," said Emily Sanders, CEO of Sanders Financial Management.
On the economic front, a reading on April existing home sales came in weaker than expected. But investors didn't seem too concerned, especially following the strong reading on new home sales released Thursday.
That report sparked a steep selloff on Wall Street as investors worried the Federal Reserve wouldn't cut interest rates by the end of the year, as had been hoped.
Investors are looking for signs that the economy is slowing enough to take the edge off inflation. But too much of a slowdown could send the economy into a recession.
Housing reports have been showing variability lately, but overall the real estate sector remains in a downward trend, Sanders said.
On the move
On the 30-stock Dow, 23 stocks gained and 7 fell.
In addition to Coca-Cola, the biggest advancers included Microsoft (up $0.47 to $30.64, Charts, Fortune 500), Honeywell (up $0.84 to $56.83, Charts, Fortune 500) and Exxon Mobil (up $1.24 to $83.52, Charts, Fortune 500).
Archstone-Smith Trust (up $3.64 to $54.77, Charts), a real estate investment trust (REIT), surged nearly 7 percent in active trading after UBS said it could be a takeover candidate, Briefing.com reported.
Chipmaker R.F. Micro Devices (up $0.36 to $6.52, Charts) climbed 7 percent in active Nasdaq trade after brokerage Jefferies & Co. upgraded the stock to "buy" from "hold," Briefing.com reported.
Gap (down $0.05 to $18.24, Charts, Fortune 500) reported lower quarterly profit late Thursday that nonetheless topped analysts' estimates. Shares edged lower Friday.
Market breadth was positive. On the New York Stock Exchange, winners beat losers by 2 to 1 on volume of 930 million shares. On the Nasdaq, advancers topped decliners 3 to 2 as 1.2 billion shares exchanged hands.
Treasury bond and commodity markets closed early.
Treasury prices slipped, raising the yield on the 10-year note to 4.86 percent from 4.84 percent late Thursday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for July delivery rose $1.02 to settle at $65.20 a barrel on the New York Mercantile Exchange.
In currency trading, the dollar slipped versus the euro and the yen, giving up gains after the weak housing market report.
COMEX gold for June delivery rose $2 to $655.30 an ounce.
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