NEW YORK - Investors resumed their buying spree on Wall Street yesterday, driving stocks higher after a bid for media firm Dow Jones & Co. Inc. revived enthusiasm about takeover activity.
The Dow Jones industrial average reached another record close, its 38th since October.
Earlier in the session, stocks had wavered on mixed economic data that showed strength in manufacturing but a wilting housing market and weak car sales. After April's big advance, investors were wary the economy could justify more increases.
But the caution dissipated after Dow Jones, which publishes the Wall Street Journal, confirmed that it had received an unsolicited bid from Rupert Murdoch's News Corp. to buy the company for $5 billion, or $60 a share.
"The market kind of just took off from there," said Todd Leone, managing director of equity trading at Cowen & Co. News of the bid boosted media firms and publishers in particular, but also encouraged buying in other sectors.
The Dow industrials rose 73.23, or 0.56 percent, to 13,136.14, after dropping to 13,041.30 in earlier trading. Broader stock indicators also pared early losses and turned higher. The Standard & Poor's 500 index rose 3.93, or 0.27 percent, to 1,486.30, and the Nasdaq composite index rose 6.44, or 0.26 percent, to 2,531.53.
Bond prices dropped after the manufacturing data made lower rates look less likely, and the yield on the benchmark 10-year Treasury note rose to 4.64 percent, up from 4.62 percent late Monday.
After investors heard Dow Jones was a takeover target, the company's stock surged $19.87, or 55 percent, to $56.20. News Corp., which owns Fox Broadcasting Co. among many other media properties, fell $1.01, or 4.2 percent, to $22.99.
Other media stocks also rose. The New York Times Co. jumped $1.53, or 7 percent, to $24.93; Journal Register Co. rose 43 cents, or 7 percent, to $6.30; and Reuters Group P.L.C.'s U.S. shares rose $2.19, or 4 percent, to $59.43.
Adding to the takeover buzz was a report that Microsoft Corp. was considering buying the online advertising firm 24/7 Real Media Inc. 24/7 Real Media rose $2.02, or 20 percent, to $11.97; Microsoft rose 25 cents, to $30.19.