S&P reaches a two-week high with strong earnings; M&A supports

On Monday, the S&P 500 reached a two-week high. The two-week high occurred immediately following substantial gains, while there was a burst of acquisitions which indicated that corporate America continues to see and notice that there is untapped value in the market.

The annual third-quarter earnings from S&P 500 components are anticipated to have risen 1.1 percent from the last quarter. The data report by Thomas Reuters I/B/E/S, this is following four quarters of contraction. There has been 78 percent of the 120 companies, that have since reported, who beat the analyst expectations. This percentage is above the long-term average of 63.5 percent.

In the last week, other companies which beat the expectations are Microsoft, who rose 2.2 percent, and Apple (NASDAQ: AAPL), who is set to report on Tuesday and increased by 0.9 percent.

According to Chad Morganlander, the portfolio manager at Stifel Nicolaus in Florham Park, New Jersey, “There is the consensus that the earnings will continue to improve in part due to encouraging energy prices, as well as, strong consumption patterns in the U.S.”

There was skepticism signaled on Wall Street that AT&T (N: T) would be authorized by the regulators to purchase Time Warner Inc (N: TWX) for a projected {currency}85.4 billion.

While the analysts scrutinized the deal, the shares of both, AT&T (N: T) and Time Warner Inc (N: TWX) fell 1.7 percent to {currency}36.86 and 3.1 percent at {currency}86.74, respectively.

On the other hand, the competitor, T-Mobile US (O: TMUS) rose significantly to its highest since August 2007. This increase occurred after it raised its forecast for customer additions for the year and said the AT&T-Time Warner deal, which could help T-Mobile carve out more market share.

The shares of T-Mobile closed up with 9.5 percent at {currency}51.19.

The average of the Dow Jones Industrial (DJI) gained 77.32 points (0.43 percent) to 18,223.03. The S&P 500 (SPX) rose 10.17 points (0.47 percent) to 2,151.33. There was rise on the Nasdaq Composite (IXIC) which added 52.43 points (1 percent) to 5,309.83.

On the other side of the coin, TD Ameritrade (O: AMTD) fell 4.4 percent to {currency}35.46. This occurred after it announced that it was planning to purchase the privately owned Scottrade Financial Services [SCTRD.UL] in a {currency}4 billion deal.

B/E Aerospace (O: BEAV) had a 16.4 percent increase to {currency}58.89. This occurrence was after the aircraft component maker Rockwell Collins (N: COL) announced that it would purchase the company. The value of the deal is {currency}6.4 billion, with an additional assumption of {currency}1.9 billion in debt. There was a decline of 6.2 percent for Rockwell at {currency}79.21.

Morganlander at Stifel noted: “There will be a continuation in the overall merger and acquisition, due in part to the low debt financing costs.”

There were 18 new 52-week highs posted by S&P 500, as well as, four new lows. There were 110 new highs and 45 new lows recorded by the Nasdaq Composite.

There were approximately 5.8 billion shared which changed hands on the U.S. exchanges. This result was below the 6.4 billion daily average over the previous 20 sessions.