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New York - Big gains in petroleum stocks lifted the US equity market on Thursday as investors bet on more large energy mergers following Royal Dutch Shell's takeover of BG Group.
The Dow Jones Industrial Average rose 56.22 points to 17 958.73.
The broad-based S&P 500 gained 9.28 points to 2 091.18, while the tech-rich Nasdaq Composite Index advanced 23.74 points at 4 974.56.
Companies mentioned as takeover targets were in favour, including Anadarko Petroleum (+3.2%) and Devon Energy (+3.0%). Others that advanced included ConocoPhillips (+3.4%) and Marathon Oil (+2.9%).
The $70bn Shell deal has "gotten everyone in the energy patch being discussed as either an acquirer or a seller," said Mace Blicksilver, director of Marblehead Asset Management.
The energy sector was further aided by a rise in oil prices. Oil services companies Halliburton and Schlumberger added 4.1% and 2.7%, respectively.
Money managers are also betting on more consolidation in other sectors, Blicksilver said. Generics company Mylan's $28.9bn bid on Wednesday for Perrigo has put both companies in play, he added.
Both companies fortified their gains from the prior session, with Perrigo tacking on 1.9% and Mylan adding 2.5%.
Dow member General Electric rose 2.9% on reports it is close to a deal to sell its real estate portfolio to Blackstone Group and Wells Fargo.
Pacific Gas and Electric dropped 1.6% after California regulators fined the utility $1.6bn for a pipeline explosion in 2010 that killed eight. Shareholders, not PG&E customers, must pay the fine.
Alcoa fell 3.4% even as earnings rebounded to $195m compared with a $178m loss in the year-ago period. The metals giant said it was studying whether to shut additional smelters and refineries. Previous closures of older assets have led to large charges.
Social gaming company Zynga slumped 17.9% on news co-founder Mark Pincus would return as top executive, less than two years after being replaced. The move comes on the heels of financial losses the last two years.
Bond prices fell. The yield on the 10-year US Treasury rose to 1.96% from 1.90% on Wednesday, while the 30-year advanced to 2.56% from 2.53%. Bond yields and prices move inversely.
