US open: M&A news bolsters main market averages

A bevy of news on the mergers and acquisitions front pushed the main Wall Street averages higher at the start of trading.

As of 1456 BST the S&P 500 was rising 0.49% or 10.38 points to 2,151.53, the Dow Jones Industrial Average by 0.47% to 18,231.88 points and the Nasdaq Composite by 0.87% to 5,303.00.25 points.

Oil prices, on the other hand, fell as Iraqi oil minister Ali al-Luaibi said it wanted to be exempt from an OPEC deal to cut production. Comments from Iran's deputy oil minister Amir Hossein Zamaninia saying Tehran would encourage other OPEC members to join an output freeze had helped to stem losses earlier in the session.

West Texas Intermediate crude dropped 1.07% to $50.31 per barrel and Brent crude slid 0.82% to $51.36 per barrel at 1459 BST.

On the data front, US manufacturing came out of the doldrums in October, according to the results of a widely-followed survey.

IHS Markit's purchasing managers' index for the US factory sector picked up from 51.5 in September to a reading of 53.2 in October, easily outpacing forecasts for a reading of 51.5.

Chris Williamson, Chief Business Economist at IHS Markit said: “Manufacturing showed further signs of pulling out of the malaise seen earlier in the year, starting the fourth quarter on a solid footing.

"Both output and new orders are rising at the fastest rates for a year amid increasingly widespread optimism that demand will pick up again after the presidential election, which has been commonly cited as a key factor that has subdued spending and investment in recent months."

In a speech on Monday morning, Stateside, St.Louis Fed president James Bullard said the central bank only needed to raise rates one more time to bring it very close to the appropriate level for short-term interest rates suggested by a so-called modified Taylor-rule.

Charles Evans and Jerome Powell were scheduled to speark later in the session.

In another speech, New York Fed president William Dudley did not make any policy-relevant remarks.

AT&T shares were under pressure in pre-market trade after its proposed $85bn takeover of Time Warner generated scepticism from Democrats and Republicans on Sunday. Time Warner shares, however, rose.

Republican candidate Donald Trump has said he would block the takeover. Democrat candidate Hillary Clinton did not comment on the proposed deal but has expressed misgivings about big mergers in the past. Senator Bernie Sander said on Twitter that the administration should "kill" the Time Warner takeover as it would mean higher prices and fewer choices for consumers.

“AT&T is already the third largest cable provider, so there is a feeling that this kind of consolidation can only be negative for consumers in both prices and range of content,” said IG’s Joshua Mahony.

“A Senate hearing in November will be the next hurdle to overcome if this deal is to become a reality.”

Elsewhere, shares in B/E Aerospace Inc. jumped after Rockwell Collins Inc. on Sunday announced a $6.4bn deal to merge the two aerospace suppliers.

Genworth Financial Inc. gained after agreeing to be bought by Chinese investment firm, China Oceanwide Holdings Group for $2.7bn.

TD Ameritrade announced it would buy-out rival Scottrade for $4bn.

Kimberly-Clark shares were lower after the maker of Huggies diapers lowered its full-year sales forecasts.

VF Corp. also lowered its annual sales guidance after it posted third quarter revenues of $3.49bn, down from the $3.53bn seen one year ago and below the $3.63bn penciled in by analysts.

T-Mobile US on the other hand saw third quarter adjusted earnings per share jump to 27 cents, coming in well ahead of the 21 cents seen by the Wall Street consensus.

From a sector standpoint the best performing industrial groups were: Mobile Telecommunications (3.46%), Real estate services (1.86%) and Tires (1.50%).