* Hillshire Brands shares jump after Pilgrim's Pride bid
* Cisco shares up on Deutsche Bank upgrade, price target
* Aeropostale jumps after it secures $150 mln credit
* Indexes up: Dow 0.5 pct, S&P 0.5 pct, Nasdaq 0.9 pct
(Updates to morning trading)
By Rodrigo Campos
NEW YORK, May 27 U.S. stocks rose on Tuesday
with the S&P 500 hitting a fresh record high supported by merger
activity and as expectations for rate cuts at the European
Central Bank stoked bids for equities.
ECB chief Mario Draghi said on Monday the bank must be
"particularly watchful" for any negative price spiral in the
euro zone. That added to suggestions from other ECB policymakers
that the bank was ready to cut rates next week to counter low
inflation and weak lending in the euro zone, keeping asset
purchases as an option.
U.S. markets were catching up to the ECB news after markets
were closed Monday for Memorial Day.
"June has been signaled as the point in time when Draghi has
to do something," said Art Hogan, chief market strategist at
Wunderlich Securities in New York. "We've had some false starts
with the ECB and we hope this is not another one. We hope this
Data was also supportive of equities. Orders for
long-lasting U.S. manufactured goods unexpectedly rose in April
even as a measure of business capital spending plans dropped.
Home prices rose in March more than expected and consumer
confidence rose to near its highest since 2008.
Utilities were leading gains on the S&P 500 after
last week hitting their lowest since early April. Still, the
Russell 2000 and Nasdaq Composite
outperformed other major indexes on Tuesday, as they did handily
last week, indicating a rotation out of small caps and momentum
shares could be over.
"We've had no disappointment as of yet on the economic data
calendar," said Hogan. "We'll continue to press up at the next
resistance level at 1,910" on the S&P.
The Dow Jones industrial average rose 75.63 points or
0.46 percent, to 16,681.9, the S&P 500 gained 10.12
points or 0.53 percent, to 1,910.65 and the Nasdaq Composite
added 36.70 points or 0.88 percent, to 4,222.50.
Shares of packaged food company Hillshire Brands
jumped 21.6 percent to $45.01 after poultry producer Pilgrim's
Pride offered to buy Hillshire in a $6.4 billion deal.
Shares of Pinnacle Foods, which is in the process of
being acquired by Hillshire, fell 6 percent to $31.26, while
Pilgrim's Pride added 4.3 percent to $26.18.
Pfizer shares edged up 0.7 percent to $29.69 a day
after the U.S. drugmaker walked away from its bid to buy
AstraZeneca for nearly 70 billion pounds ($118 billion).
U.S.-traded AstraZeneca shares dropped 1.3 percent to $71.35.
Aeropostale shares jumped 13.8 percent to $3.88
after the apparel retailer secured a $150 million lifeline from
affiliates of private equity firm Sycamore Partners.
(Reporting by Rodrigo Campos; Editing by Bernadette Baum and