Major stock indexes hit fresh highs in afternoon trading Monday as Wall Street prepped for the start of the two-day Fed meeting Tuesday.
The Nasdaq composite was up 0.4%; the Dow Jones industrial average rose 0.3% and the S&P 500 climbed 0.2%. Small caps outperformed with the Russell 2000 up 0.7%. Volume on both exchanges was tracking lower than Friday’s levels, but volume Friday was skewed by options expirations.
Janet Yellen and Federal Open Market Committee members are not expected to lift interest rates, but Wall Street could get more specifics on when the Fed will start selling off bond holdings in its bloated $4.5 trillion portfolio. Since hitting a low of 2.03% earlier this month, the 10-year Treasury yield has bounced back to around 2.20%.
A decision on interest rates is due Wednesday at 2 p.m. ET. A press conference will follow at 2:30.
In the stock market today, another big merger made headlines when defense contractor Northrop Grumman (NOC) announced plans to buy Orbital ATK (OA) for $9.2 billion. The deal values Orbital at 134.50 a share, a 22% premium to Friday’s close. Shares of Orbital ATK soared 20% to 132.30. Northrop gained 2%.
The deal comes on the heels of news earlier this month that United Technologies (UTX) is merging with aircraft parts supplier Rockwell Collins (COL) for $30 billion. Boeing has signaled it might try to block the deal.
In 2014, Alliant Techsystems merged its aerospace and defense business with Orbital Sciences in a deal valued at around $5 billion.
Elsewhere, Nvidia (NVDA) vaulted 5% to 189.28 after Bank of America maintained its buy rating but lifted Nvidia’s price target to 210 from 185. Shares of Nvidia jumped 6% Friday after Evercore ISI made positive comments and significantly raised Nvidia’s price target to 250 from 180. Nvidia has quickly become extended from a 174.66 buy point.
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Other solid gainers included Scientific Games (SGMS). Shares soared 7% to 41.10. Headed into the week, the gaming-equipment firm was working on a later-stage, cup-shaped base with a 39.35 buy point. The 5% buy zone goes up to 41.32.
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