Stocks up around the world on China data, M&A
By Ryan Vlastelica
NEW YORK (Reuters) - Stock markets around the world rose on Wednesday, with the Dow Jones industrial average ending at record levels as strong China growth data and potential big deals in the United States boosted investor sentiment.
Commodity prices also found support from the Chinese data, which pointed to improving demand, while gold rebounded after a two-day drop and Europe rose on easing concerns over the vulnerability of Portugal's largest listed lender.
Wall Street stocks gained on proposed acquisition activity. Time Warner Inc jumped 17 percent after Twenty-First Century Fox confirmed it had made an $80 billion offer for Time Warner, which turned it down.
Investors also took heart from a round of positive earnings, including from tech bellwether Intel Corp, which rose 9.3 percent to $34.65 on better-than-expected results.
Equity prices have stalled recently as investors questioned whether fundamentals justified indexes being at or near records. On Tuesday, shares dipped after Federal Reserve Chair Janet Yellen said some sectors of the U.S. stock market had "substantially stretched valuations."
"The M&A activity and results really validate current levels, which Yellen had raised a red flag on," said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.
China's economy expanded at a 7.5 percent annual pace in the second quarter, the statistics bureau said, just beating the 7.4 percent median forecast in a Reuters poll. The data confirmed the economy had stabilized after a shaky start to the year, though analysts said the pick-up was largely driven by government stimulus.
"There's a lot of good news to go around today, but given all the worries there were about China, the data there is especially a positive," Colas said. Continued...