Stocks rise as oil jumps to 2-year high
NEW YORK » U.S. stocks made modest gains and set more records Monday as upheaval in oil-rich Saudi Arabia sent crude prices to two-year highs. Chipmakers and media companies climbed on deal reports while phone and household goods companies sank.
U.S. crude oil reached its highest price since mid-2015 after dozens of Saudi princes and senior officials and businessmen were arrested as part of a purported corruption investigation. Saudi Arabia is the world’s largest exporter of oil, and investors wondered if the tumult could constrict oil supplies and drive prices higher. Energy companies jumped, with drilling companies making some of the biggest gains.
Chipmakers surged after Broadcom offered to buy competitor Qualcomm for $103 billion, which would be the largest technology acquisition ever if it’s completed. Wireless carriers Sprint and T-Mobile tumbled after they called off merger talks over the weekend, and reports that Sprint’s owner, Japanese conglomerate SoftBank, might buy cable company Charter hammered shares of telecom giants AT&T and Verizon, which might face tougher competition.
Doug Coté, chief market strategist for Voya Investment Management, said in the years after the global economic crisis, companies combined so they could survive. But now that the global economy is doing much better, they’re merg-
ing for different reasons.
“Global economic growth is expanding somewhat rapidly and the M&A is looking to capitalize on the growth
areas, in particular technology,” he said. “Any capital investment cycle will begin with technology.”
Companies that make and sell household goods slumped on weak quarterly results from CVS Health and food distributor Sysco.