US STOCKS-Wall St rises; Internet, biotech names lift Nasdaq

Reuters - UK Focus

* Internet names rally; concerns remain over valuation

* AT&T (NYSE: T - news) to buy DirecTV (Frankfurt: DIG1.F - news) for $48.5 billion

* Russell 2000 rebounds after three-day decline

* Dow up 0.1 pct; S&P 500 up 0.4 pct; Nasdaq up 0.9 pct (Updates to close)

By Ryan Vlastelica

NEW YORK (Frankfurt: HX6.F - news) , May 19 (Reuters) - U.S. stocks rose on Monday,with a rally in high-growth names among Internet and biotechshares giving the Nasdaq a gain of almost 1 percent.

Equities have been pressured recently, with the S&P 500coming off its first two-week decline since January as investorshave become concerned about the economy's growth prospects.

"The listlessness in the market shows the struggle investorsare having right now: Valuations are full but not stretched, andthere's a lack of decisive evidence that the economy will kickinto higher growth and justify these valuations," said MarkLuschini, chief investment strategist at Janney Montgomery Scottin Philadelphia.

High-growth "momentum" stocks were among the strongest ofthe day, with TripAdvisor Inc (NasdaqGS: TRIP - news) up 5.2 percent at $86.41and Netflix Inc (NasdaqGS: NFLX - news) up 4.2 percent at $364.50. VertexPharma gained 3.4 percent to $67.22.

Internet and biotech names have been among the most volatilein recent weeks, advancing on signs of economic improvement andslumping on concerns that their valuations are too hefty. Thesmall-cap Russell 2000 index rose 1 percent after threestraight declines that took it several times near correctionterritory, a drop of 10 percent from a recent high.

The Dow Jones industrial average advanced 20.55points, or 0.12 percent, to end at 16,511.86. The Standard &Poor's 500 Index gained 7.22 points, or 0.38 percent, tofinish at 1,885.08. The Nasdaq Composite Index shot up35.23 points, or 0.86 percent, to close at 4,125.82.

The Dow's gain was limited as AT&T Inc fell 1 percentto $36.38 a day after the U.S. phone company agreed to buyDirecTV, the No. 1 U.S. satellite TV provider, for $48.5billion. DirecTV shares fell 1.8 percent to$84.65.

U.S.-listed shares of AstraZeneca (NYSE: AZN - news) sank 12 percent to$70.64 after the British drugmaker rejected a "final" mergeroffer from Pfizer (NYSE: PFE - news) . Shares of Pfizer rose 0.6 percent to$29.28.

Campbell Soup Co fell 2.4 percent to $44.06 and wasone of the S&P 500's worst performers after the world's largestsoup maker posted weaker-than-expected quarterly sales and cutits full-year sales forecast.

After the market closed, Urban Outfitters Inc (NasdaqGS: URBN - news) fell4.3 percent to $34.60 after the teen apparel retailer reportedits first-quarter results.

Early in the session, a drop in the yield of the 10-yearU.S. Treasury note to near 2.5 percent gaveinvestors another reason to buy equities and helped support thestock market. By late in the day, though, longer-term bondyields rose as investors sold some Treasuries to take profitsfrom the recent rally. The 10-year note's yield was 2.55 percentlate on Monday, while its price fell 8/32.

About 62 percent of stocks traded on the New York StockExchange closed higher, while two-thirds of Nasdaq-listed sharesended higher.

About 4.94 billion shares traded on all U.S. platforms,according to BATS exchange data, below the month-to-date averageof 6.05 billion. (Editing by Jan Paschal)

View Comments (0)