Credit: Shutterstock photoWall Street closed on a winning note on Monday buoyed by the announcement of two multi-billion dollar mergers & acquisition (M&A) deals. The proposed merger between PepsiCo and Sodastream as well as between Tyson food and Keystone Foods reinforced Investor confidence in the U.S. economic expansion. Consequently, all three major stock market indexes ended in the positive territory for the third-straight trading day.
The Dow Jones Industrial Average (DJI) closed at 25,758.69, gaining 0.4%. The S&P 500 Index (INX) was up 0.2% to close at 2,857.05. The Nasdaq Composite Index (IXIC) closed at 7,821.01, increasing 0.1%. A total of 5.31 billion shares were traded on Monday, lower than the last 20-session average of 6.53 billion shares. Advancers outnumbered decliners on the NYSE by 2.36-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.55-to-1 ratio. The CBOE VIX decreased 1.2% to close at 12.49.
How Did the Benchmarks Perform?
The Dow ended at 25,758.69 with 17 components of the 30-stock blue-chip index closing in the green, while twelve finished in the red and one remained unchanged. Tech-heavy Nasdaq Composite also managed to finish in the green following strong performance of some large-cap tech giants.
The S&P 500's gain was led by a 0.7% increase in Materials Select Sector SPDR (XLB), Consumer Discretionary Select Sector SPDR (XLY), Industrials Select Sector SPDR (XLI) and Energy Select Sector SPDR (XLE). Notably, eight out of 11 sectors of the benchmark index closed in the green while three ended in the red.
Mega M&A Deals Drive Stock Markets
Soft drinks and snacks giant PepsiCo Inc. PEP will be acquiring Israel-based at-home beverage company SodaStream International Ltd. SODA for $3.2 billion. PepsiCo will pay $144 per share of SodaStream, reflecting a 32% premium to its 30-day volume weighted average price.
The proposed acquisition will provide a new business line to PepsiCo through which it can deliver carbonated soft drinks directly to customer's homes instead of through stores. This will be of immense help to the company as more and more U.S. consumers are moving toward online grocery shopping.
Following the news, the stock price of PepsoCo was down 0.1% while SodaStream was up 9.4%. PepsiCo carries a Zacks Rank #3 (Hold) while SodaStream sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Additionally, Tyson Foods Inc. TSN has entered into an agreement to acquire Keystone Foods from Brazilian food-processor Marfrig Global Foods for a total consideration of $2.16 billion. Keystone supplies chicken, beef, pork and fish to major restaurants, convenience store channels and retail outlets. The acquisition will enhance Tyson's protein products delivery capabilities. Following the news, the stock price of Tyson Foods was up 1.6%.
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Pepsico, Inc. (PEP): Free Stock Analysis Report
Tyson Foods, Inc. (TSN): Free Stock Analysis Report
SodaStream International Ltd. (SODA): Free Stock Analysis Report
ConocoPhillips (COP): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
