Stocks fall short of record high

The US stock market ended higher, but a late fade kept it from closing at an all-time high.

A late fade kept the US stock market from closing at an all-time high
A late fade kept the US stock market from closing at an all-time high

The market marched broadly higher most of the day, helped by optimism about the economy and more corporate mergers, only to slowly lose momentum in the final half hour of trading.

The Standard & Poor's 500 index ended up 11.36 points, or 0.6%, to 1,847.61 - just short of its record close of 1,848.38 set on January 15. The momentum helped the index set a new intraday high of 1,858.76 earlier in the day, however.

The Dow Jones industrial average rose 103.84 points, or 0.6%, to 16,207.14 and the Nasdaq composite rose 29.56 points, or 0.7%, to 4,292.97.

Investors had little in the way of economic data or corporate earnings to work through, so much of Monday's focus was on another round of corporate deal making.

Chipmaker RF Micro Devices jumped 1.22 dollars, or 21%, to 7.03 after it said would buy a competitor, TriQuint Semiconductor, in an all-stock deal valued at about 1.56 billion dollars. TriQuint soared 2.41, or 26%, to 11.64.

Meanwhile, men's clothing chain Jos A Bank rose 4.99, or 9%, to 60.04 after competitor Men's Wearhouse increased its buyout offer. Men's Wearhouse rose 3.40, or 8%, to 48.51.

M&A has taken off this year. Last week, Forest Laboratories and Actavis announced a 25 billion-dollar merger and Facebook said it was buying WhatsApp for 19 billion dollars. That's on top of deals or offers announced this week.

Companies buying competitors, or buying up a company whose product interests them, should be seen as a positive for stocks, market watchers say.

"It shows that companies still see value in this market, even at these highs," said Quincy Krosby, a market strategist at Prudential Financial.

In the last two and a half weeks, the stock market has basically erased of the losses it experienced after a difficult start to the year.

The S&P 500 index was down as much as 6% for the year as of February 3 as investors worried about emerging markets like China and Turkey. The US economic recovery was also showing signs of slowing growth.

But the US stock market has recovered as turbulence in overseas markets calms down.

In the latest development in overseas markets, the chaos in Ukraine came to an abrupt halt over the weekend following the ousting of President Viktor Yanulovych. Investors had been worried about the escalating violence.

"The risks in emerging markets continue to recede, and now the problems in the Ukraine are out of the way," said Bill Stone, chief investment strategist at PNC Wealth Management.

The S&P 500's 1,850-point level continues to be a ceiling for investors trying to bid stocks higher. The index has tried to close above 1,850 three times in the last three months, failing each time.

Investors have a chance to test all-time highs after economic reports come out later this week.

Fed chairwoman Janet Yellen will give evidence in front of the Senate Banking Committee on Thursday. Economic reports this week include durable goods orders and U.S. fourth-quarter gross domestic product.

Government bond prices were flat. The yield on the 10-year Treasury note was unchanged from Friday at 2.74%. The price of oil rose 62 cents to 102.82 dollars a barrel. Gold rose 14.40 to 1,338 dollars an ounce.

In other corporate news:

- Netflix and Comcast reached an agreement to ensure that the online video service's shows and movies are streamed smoothly. No details were released about the cost to Netflix. Comcast gained 10 cents, or 0.2%, to 51.15 and Netflix was up 14.77, or 3%, to 447.

- eBay rose 1.71, or 3%, to 56.30 after the activist shareholder Carl Icahn disclosed a 2% stake in the company. Icahn is looking to replace several members of eBay's board of directors.