Stocks rebounded Friday, closing with solid gains, as investors adjusted positions ahead of a long holiday weekend, and drew optimism from the Nasdaq Stock Market Inc.’s deal to acquire Sweden’s OMX AB.
The market showed relatively little reaction the National Association of Realtors’ report that sales of existing homes fell 2.6 percent in April to 5.99 million units, the slowest sales rate in almost four years.
Nasdaq’s $3.67 billion deal gives the stock market entrance to Europe through OMX, which operates exchanges in seven Nordic countries. It will become the world’s second trans-Atlantic exchange after the New York Stock Exchange bought Paris-based Euronext earlier this year.
Wall Street retreated Thursday following housing data that showed sales of single-family homes surged in April by the largest amount in 14 years but that prices fell sharply as well. While a resilient housing market would likely be good for the economy, it could also reduce the likelihood the Federal Reserve would reduce interest rates.
“I view the optimism with a little skepticism. It’s just a very, very wacky market,” said Ted Aronson, a partner at Aronson Johnson Ortiz, referring to the overall mood on Wall Street. He contends the implications of a still-settling housing market are difficult to quantify and give him pause though he is still mostly bullish.
The Dow Jones industrial average closed the session up 66.15 points, or 0.49 percent. The Dow has fallen in the last four sessions. The broader Standard & Poor’s 500-stock index advanced 8.22 points, or 0.55 percent, and the Nasdaq composite index rose 19.27 points, or 0.76 percent.
Bonds fell following the housing data and as stocks regained lost ground Friday. The yield on the benchmark 10-year Treasury note rose to 4.87 percent from 4.84 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.
The price of light, sweet crude rose on the New York Mercantile Exchange.
In corporate news, Nasdaq’s stock fell $1.14, or 3 percent, to $32.84 after announcing its OMX bid. The combined operations will form the world’s second trans-Atlantic exchange.
Retailer Gap Inc. fell 9 cents to $18.20 after reporting its first-quarter profit fell 26 percent. Results excluding costs for shutting the company’s handful of Forth & Towne stores topped Wall Street’s forecast.
Coca-Cola Co., one of the 30 stocks that makes up the Dow industrials, rose 66 cents to $51.90 after the beverage maker said it would acquire Vitaminwater maker Glaceau for $4.1 billion in a bid to expand its non-carbonated beverage line.
SourceForge Inc., formerly VA Software Corp., said its third-quarter profit rose as a result of the sale of its enterprise software business. The stock jumped 16 percent.
Verigy Ltd. jumped 20 percent after the Singapore chip-testing equipment maker forecast stronger-than-expected sales.
RF Micro Devices Inc., which makes radio frequency components used in mobile devices, advanced 34 cents, or 6 percent, to $6.50 after an analyst raised his rating on the stock, contending demand for the company’s products will improve in the second half of the year.
Tribune Co. said nearly twice as many shareholders as expected agreed to a payment of $34 per share in the company’s tender offer. The move is the first formal step in the company’s plan to be taken private under a buyout led by billionaire investor Sam Zell. Tribune fell $1.06, or 3 percent, to $32.14 following a Wall Street Journal report that the company agreed to difficult borrowing terms in order to finance the offer.
Overseas, Japan’s Nikkei stock average fell 1.22 percent. Sometimes-volatile Chinese stocks set fresh closing records Friday. The benchmark Shanghai Composite Index rose 0.7 percent. The Shenzhen Composite Index rose 1.6 percent.
Britain’s FTSE 100 finished up 0.08 percent, Germany’s DAX index rose 0.54 percent and France’s CAC-40 rose 0.15 percent.