US stocks higher after AT&T-Time Warner merger announced

(FILES) This file combination of pictures created on October 21, 2016 shows an AT&T cellphone store (TOP) in Springfield, Virginia, on October 23, 2014, and the Time Warner company logo on the front of the headquarters building, 24 November, 2003 in New York.  An AT&T-Time Warner mega-deal could create a new kind of media-tech firm in an age where consumers get content Netflix-style, when they want it on any device. Or it could be a remake of another huge merger 16 years ago that sought to unite the media-entertainment giant with another tech sector leader but ended in failure.The deal unveiled October 22, 2016 aims to make AT&T a powerhouse positioned for a sector facing major technology changes.  / AFP PHOTO / SAUL LOEB AND STAN HONDA

(FILES) This file combination of pictures created on October 21, 2016 shows an AT&T cellphone store (TOP) in Springfield, Virginia, on October 23, 2014, and the Time Warner company logo on the front of the headquarters building, 24 November, 2003 in New York.<br />An AT&T-Time Warner mega-deal could create a new kind of media-tech firm in an age where consumers get content Netflix-style, when they want it on any device. Or it could be a remake of another huge merger 16 years ago that sought to unite the media-entertainment giant with another tech sector leader but ended in failure.The deal unveiled October 22, 2016 aims to make AT&T a powerhouse positioned for a sector facing major technology changes.<br />/ AFP PHOTO / SAUL LOEB AND STAN HONDA

US stocks rose early Monday but both AT&T and Time Warner shares dropped on news of their controversial $108.7 billion mega merger as antitrust challenges loomed.

AT&T’s takeover of Time Warner would transform the telecom giant into a media-entertainment powerhouse. But it is expected to face tough scrutiny from politicians and antitrust officials. Shares of Time Warner fell 2.6 percent, while AT&T lost 1.3 percent.

The market faces a heavy week of earnings reports that accelerates on Tuesday with Caterpillar, Procter & Gamble and General Motors.

About 35 minutes into trade, the Dow Jones Industrial Average stood at 18,240.02, up 0.5 percent.

The broad-based S&P 500 advanced 0.5 percent to 2,152.71, while the tech-rich Nasdaq Composite Index gained 0.8 percent to 5,301.83.

Analysts said investors were cheered by a series of smaller merger and acquisition announcements.

B/E Aerospace, a supplier of aircraft cabin equipment, surged 15.7 percent on news it will be bought by Rockwell Collins for $6.4 billion in cash and stock plus $1.9 billion in the assumption of debt. Rockwell Collins fell 5.2 percent.

TD Ameritrade lost 2.3 percent following an announcement that it will buy privately-held Scottrade for $4 billion, combining two large online brokerages.

Hilton Worldwide climbed 1.7 percent after Chinese conglomerate HNA Group said it would acquire a 25 percent stake in the global hospitality giant from investment firm Blackstone for $6.5 billion.

Rival hotelier Marriott International rose 1.3 percent.

Kimberly-Clark fell 2.9 percent after third-quarter earnings and revenues missed analyst expectations, with chief executive Thomas Falk pointing to “a more challenging economic and competitive environment.”

Kimberly-Clark, which makes toilet paper and other household products, also slashed its full-year forecast.

T-Mobile US jumped 6.5 percent after announcing that third-quarter net profit more than doubled to $1.1 billion as it added two million wireless customers.

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