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Japanese stocks rose, sending the Nikkei 225 Stock Average to its highest close since May, as U.S. consumer confidence boosted the outlook for the global economic recovery and China refrained from raising interest rates.
Nippon Steel Corp., Japan’s largest maker of the alloy, climbed 2.7 percent after JPMorgan Chase & Co. increased its investment recommendation to “overweight.”
Machinery makers advanced after Credit Suisse AG raised its view on Japanese factory automation-related companies to bullish from bearish, saying orders for machine tools will likely increase. SMC Corp., a maker of directional-control devices, rallied 2.4 percent to 14,250 yen, the highest close since November 2007. THK Co., which makes industrial machinery, leapt 5.6 percent to 1,912 yen. Nabtesco Corp., a maker of hydraulic equipment, jumped 5.9 percent to 1,690 yen, a level not seen since January 2008.
Honda Motor Co., Japan’s second-biggest carmaker by sales that gets 44 percent of its revenue from North America, gained 1.1 percent. Toyota Motor Corp., the largest carmaker worldwide, gained 0.6 percent to 3,250 yen. Toshiba Corp., a maker of electronics and power equipment that gets more than half of its revenue abroad, climbed 1.9 percent to 440 yen.
TDK Corp., an electronics maker that derives more than 30 percent of its sales in China, advanced 2.8 percent.
Hitachi Construction Machinery Co., which is the world’s biggest maker of giant excavators and gets more than one-fourth of its sales in China, increased 1 percent to 1,992 yen. Komatsu Ltd., a maker of earth movers that gets about 20 percent of its sales in China, rose 1.4 percent to 2,462 yen.
Shares also gained as the yen weakened, improving the earnings prospects for exporters, and on speculation Japan will extend a capital-gains tax break by a year.
European stocks climbed for a sixth day, extending a two-year high, after China refrained from raising interest rates even as inflation surged.
The People’s Bank of China, which last week raised reserve- requirement ratios for banks by half a percentage point, didn’t increase interest rates this weekend even as consumer prices climbed at the fastest pace in more than two years in November.
Kazakhmys increased 4.1 percent to 1,592 pence, Xstrata Plc advanced 1.4 percent to 1,461.5 pence and Rio Tinto Group added 1.9 percent to 4,479 pence after copper jumped to a record on the London Metal Exchange. Chinese imports of copper and products rose 29 percent last month. Wellstream Plc jumped 5.8 percent after General Electric Co. agreed to buy the oilfield-services provider for about 800 million pounds ($1.3 billion).
John Wood Group Plc rallied 6.7 percent after agreeing to acquire PSN Ltd.
Yule Catto & Co. increased 12 percent to 290 pence after the supplier of polymers agreed to buy a latex maker from TowerBrook Capital Partners for 443 million euros ($585 million) to target the market for materials used in gloves.
Rhodia SA climbed 6 percent to 22.59 euros after Credit Suisse Group AG initiated coverage of the chemical maker with an “outperform” recommendation.
Renault gained 2.2 percent to 45 euros after Le Figaro reported that full-year sales may reach 38 billion euros, up from 33.7 billion euros in 2009. The newspaper did not say where it obtained the information.
Intercell AG plunged 41 percent to 10 euros after a vaccine patch to prevent diarrhea in travelers failed in two patient studies, prompting the company to forecast a wider loss. Deutsche Bank AG lowered its recommendation for the Vienna-based company to “sell” from “buy.”
U.S. stocks hovered near the break-even point Monday as investors mulled over a flurry of corporate deals and awaited a Senate vote on the extension of the Bush tax cuts.
All but twelve components of the Dow 30 gained. Caterpillar (CAT, Fortune 500), Disney (DIS, Fortune 500) and Chevron (CVX, Fortune 500) were the biggest winners, while Bank of America (BAC, Fortune 500), Intel (INTC, Fortune 500) and Boeing (BA, Fortune 500) led the declines.
Markets churned higher last week, with the S&P 500 reaching its highest level in two years on Friday, amid upbeat economic news and a dividend hike by General Electric.
Companies: Corporate dealmaking talk greeted investors Monday.
General Electric (GE, Fortune 500) offered $1.3 billion for Wellstream Holdings, an engineer and manufacturer of products for oil and gas transportation in the subsea production industry. Shares of GE edged lower.
Thermo Fisher Scientific (TMO, Fortune 500), the parent company of Thermo Scientific and Fisher Scientific, announced that it would acquire Dionex (DNEX) for about $2.1 billion -- or $118.50 per share in cash. Dionex is a leading manufacturer and marketer of chromatography systems. Thermo Fisher's offer represents a 21% premium to Dionex's closing stock price on Dec. 10.
Dell (DELL, Fortune 500) announced that it has purchased data storage company Compellent Technologies (CML) for $27.75 per share in cash. Last Thursday, Dell announced it was in talks with Compellent about a potential deal. Shares of Dell fell 3%, while shares of Compellent slid 2.7%. The deal is a "take-under," since it valued Compellent at a lower price than its previous close.
Shares of FedEx (FDX, Fortune 500) edged up slightly on what was projected to be the delivery giant's busiest day of the year. The company expects to move nearly 16 million shipments around the world on Monday.
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