* Internet names rally; concerns remain over valuation
* AT&T to buy DirecTV for $48.5 billion
* Russell 2000 rebounds after three-day decline
* Dow up 0.1 pct; S&P 500 up 0.4 pct; Nasdaq up 0.9 pct
(Updates to close)
By Ryan Vlastelica
NEW YORK, May 19 U.S. stocks rose on Monday,
with a rally in high-growth names among Internet and biotech
shares giving the Nasdaq a gain of almost 1 percent.
Equities have been pressured recently, with the S&P 500
coming off its first two-week decline since January as investors
have become concerned about the economy's growth prospects.
"The listlessness in the market shows the struggle investors
are having right now: Valuations are full but not stretched, and
there's a lack of decisive evidence that the economy will kick
into higher growth and justify these valuations," said Mark
Luschini, chief investment strategist at Janney Montgomery Scott
High-growth "momentum" stocks were among the strongest of
the day, with TripAdvisor Inc up 5.2 percent at $86.41
and Netflix Inc up 4.2 percent at $364.50. Vertex
Pharma gained 3.4 percent to $67.22.
Internet and biotech names have been among the most volatile
in recent weeks, advancing on signs of economic improvement and
slumping on concerns that their valuations are too hefty. The
small-cap Russell 2000 index rose 1 percent after three
straight declines that took it several times near correction
territory, a drop of 10 percent from a recent high.
The Dow Jones industrial average advanced 20.55
points, or 0.12 percent, to end at 16,511.86. The Standard &
Poor's 500 Index gained 7.22 points, or 0.38 percent, to
finish at 1,885.08. The Nasdaq Composite Index shot up
35.23 points, or 0.86 percent, to close at 4,125.82.
The Dow's gain was limited as AT&T Inc fell 1 percent
to $36.38 a day after the U.S. phone company agreed to buy
DirecTV, the No. 1 U.S. satellite TV provider, for $48.5
billion. DirecTV shares fell 1.8 percent to
U.S.-listed shares of AstraZeneca sank 12 percent to
$70.64 after the British drugmaker rejected a "final" merger
offer from Pfizer. Shares of Pfizer rose 0.6 percent to
Campbell Soup Co fell 2.4 percent to $44.06 and was
one of the S&P 500's worst performers after the world's largest
soup maker posted weaker-than-expected quarterly sales and cut
its full-year sales forecast.
After the market closed, Urban Outfitters Inc fell
4.3 percent to $34.60 after the teen apparel retailer reported
its first-quarter results.
Early in the session, a drop in the yield of the 10-year
U.S. Treasury note to near 2.5 percent gave
investors another reason to buy equities and helped support the
stock market. By late in the day, though, longer-term bond
yields rose as investors sold some Treasuries to take profits
from the recent rally. The 10-year note's yield was 2.55 percent
late on Monday, while its price fell 8/32.
About 62 percent of stocks traded on the New York Stock
Exchange closed higher, while two-thirds of Nasdaq-listed shares
About 4.94 billion shares traded on all U.S. platforms,
according to BATS exchange data, below the month-to-date average
of 6.05 billion.
(Editing by Jan Paschal)