Stocks jump on M&A activity, earnings

By Ryan Vlastelica

NEW YORK (BestGrowthStock) – Mid- and smallcap stocks rose on Monday on new merger and acquisition activity and some strong quarterly results.

Dollar Thrifty Automotive Group Inc (DTG.N: ) surged 15 percent to $50.64 after Avis Budget Group Inc (CAR.N: ) said it intends to make a “substantially higher” offer for the company than one by Hertz Global (HTZ.N: ), which recently offered to buy the company for $1.2 billion.

Avis shares slid 3.4 percent to $14.61 while Hertz lost 5.3 percent to $13.70.

Also on the M&A front, UAL Corp (UAUA.O: ), the parent of United Airlines, agreed to buy Continental Airlines Inc (CAL.N: ) for $3.17 billion, sparking hopes of further consolidation in the sector.

“Continental is one of the best airlines, and for them to say that it makes sense to go with another company is going to convince a lot of other firms that it could make sense to merge,” said Doug Cannon, president of Texas First Capital Management in Houston.

Midcap firm AirTran Holdings (AAI.N: ) advanced 2.7 percent to $5.42 while SkyWest (SKYW.O: ) was up 1.7 percent at $15.23.

Earnings continued to lift small-cap stocks, with Administaff Inc (ASF.N: ) soaring 20 percent to $26.47 after it posted a surprise first-quarter profit (Read more your timing to make a profit.).

Cannon said the results suggested that smaller companies were growing and hiring temporary workers. While Cannon said the companies were not confident enough to hire full-time personnel, “this is still a good short-term signal for small-cap companies.”

In the pharmaceutical sector, Raptor Pharmaceutical Corp (RPTP.O: ) surged 36 percent to $3.35 after it said a mid-stage study of its experimental drug for a progressive form of liver disease met the main trial goal of reducing the level of certain liver enzymes by half.

The S&P MidCap 400 index (.MID: ) rose 1.3 percent while the S&P SmallCap 600 index (.SML: ) advanced 1.8 percent. In comparison, the benchmark S&P 500 (.SPX: ) gained 1.3 percent.

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(Editing by Leslie Adler)

Stocks jump on M&A activity, earnings