Economics: USA: Several signs of stock market recovery from Shanghai Pox, but home-loan defaults forebode recession possibliity

Bloomberg's Nick Baker, "U.S. Stocks Climb on Acquisitions, Oil Decline; Intel Surges" (Mar12,2k7).

March 12 (Bloomberg) -- U.S. stocks extended a week of gains, buoyed by $31.7 billion of acquisitions, falling oil prices and an analyst's prediction that demand for mobile-phone chips will grow.

Dollar General Corp. rose the most ever and led the Standard & Poor's 500 Index to its third gain in three days after it agreed be acquired by Kohlberg Kravis Roberts & Co. Intel Corp. drove technology shares to their highest level this month, lifting the Dow Jones Industrial Average and Nasdaq Composite Index.

Today's takeovers gave investors another reason to buy stocks after last week's unexpected drop in February unemployment and Treasury Secretary Henry Paulson's reassurances that the economy will avoid recession. The S&P 500 now has recovered almost half its losses since the global rout in equities Feb. 27.

``People like to see deals,'' said Edgar Peters, who oversees $22 billion as chief investment officer at PanAgora Asset Management in Boston. ``They like to see the stocks they own may be undervalued and could be bought out.''

The S&P 500 added 3.75, or 0.3 percent, to 1406.60. The Dow industrials rose 42.30, or 0.3 percent, to 12,318.62, while the Nasdaq climbed 14.74, or 0.6 percent, to 2402.29. The gains came even as shares in most financial companies fell on mounting concern that home-loan defaults are rising.

Stocks advanced last week, rebounding from the largest weekly loss in four years. Last year, takeovers amounted to a record $3.68 trillion worldwide, and investors have said a rally in 2007 hinges in part on a continuation of that pace.

For details, click the live-linked headline for Nick Baker's full article.