Index of small companies rises as others fall slightly
Small-company stocks were a bright spot in a subdued start to the week for Wall Street.
The Russell 2000, an index of small-company stocks, climbed above 1,000 points for the first time and ended higher Monday, even as the Dow Jones industrial average, the Standard & Poor’s 500 index and the Nasdaq composite index all edged lower.
The gains for the smaller companies are encouraging for the broader stock market because they show that investors are becoming more comfortable about the economy and investing in riskier assets, said Rob Lutts, Chief Investment Officer at Cabot Money Management.
“Having smaller stocks hit new highs means that the rally is broad,” Lutts said. “It gives us a little more confidence that it’s a good, sustainable rally that can hold together for a while.”
The Dow Jones industrial average closed down 19.12 points, or 0.1 percent, at 15,335.28. The Nasdaq composite index fell 2.53 points, or 0.1 percent, to 3,496.43 points. The Standard & Poor’s 500 index fell 1.18 points, or 0.1 percent, to 1,666.29.
Generic drugmaker to buy Irish pharmaceutical firm
Actavis is buying Warner Chilcott in an all-stock deal valued at about $8.5 billion that would create the third-biggest specialty pharmaceutical company in the U.S. market.
The announcement Monday comes after the companies said earlier this month that they were in talks about a possible pairing of one of the world’s largest generic drugmakers, Actavis Inc., with an Irish company that has a portfolio of established, branded drugs.
The combined company will be incorporated in Ireland, and analysts say that country’s lower tax rate is a key to making the deal work.
Economists more bullish now than few months ago
Consumer spending is likely to pick up this year, while government spending declines at a faster rate, according to a survey of business economists.
The economists predict that the U.S. economy will grow 2.4 percent this year and 3 percent next year. That’s unchanged from their forecast in February.
But they are more bullish on consumer spending and housing than they were three months ago, in part because of a more positive view about unemployment.
The survey was released Monday by the National Association for Business Economics.
Online takeout rivals plan to create a new company
Rival online takeout services Seamless North America and GrubHub on Monday announced plans to combine and create a new company covering more than 20,000 restaurants in 500 cities across the U.S.
Financial terms were not disclosed and it’s unclear what the combined company will be called.
GrubHub CEO Matt Maloney will become CEO, while Seamless CEO Jonathan Zabusky will serve as president, the companies said in a joint statement.
Credit card debt, number of late payments decline
Americans got better about paying their credit card debt on time in the first three months of the year, a period when many borrowers use income tax returns to tackle their debt from the holiday season.
The rate of credit card payments at least 90 days overdue fell to 0.69 percent in the first quarter from 0.85 percent a year earlier — a drop of nearly 19 percent, credit reporting agency Trans- Union said Tuesday.
The January-March card delinquency rate was also down from 0.73 in the October-December quarter, when many consumers ramped up credit use to finance holiday season purchases.
— From news service reports