- The Washington Times - Monday, November 7, 2005

NEW YORK (AP) — Lower oil prices and technology news helped stocks rally yesterday despite a legal dispute that raised questions about Johnson & Johnson’s $25 billion acquisition of Guidant Corp.

Investors had little information to guide them through the session, with few third-quarter earnings reports remaining and no major economic data scheduled this week. News that Microsoft Corp. is in talks to buy a stake in American Online Inc. and a deal involving TiVo Inc. and Yahoo Inc. drove gains in the technology sector.

The market found some comfort in the declining price of crude oil, which sank more than $1 a barrel as recent unusually warm weather quelled fears of a winter heating oil shortage, although the International Energy Agency reiterated concerns about capacity. A barrel of light crude lost $1.11 to settle at $59.47 on the New York Mercantile Exchange.

The Dow Jones industrial average gained 55.47, or 0.53 percent, to 10,586.23, its highest close since Sept. 16.

Broader stock indicators were also higher. The Standard & Poor’s 500 Index was up 2.67, or 0.22 percent, at 1,222.81, and the Nasdaq Composite Index advanced 8.81, or 0.41 percent, to 2,178.24.

Bonds rose after reaching eight-month lows last week, with the yield on the 10-year Treasury note sliding to 4.63 percent from 4.67 percent late Friday. The dollar gained ground against most major currencies, while gold prices inched upward.

Yesterday’s quiet trading session follows two straight weeks of sturdy gains as investors sifted through quarterly profit reports and mostly positive economic numbers for any indication of the market’s direction. Last week, the major indexes each added more than 1 percent.

In corporate news, Guidant said it filed a lawsuit seeking to force Johnson & Johnson to complete a $25.4 billion takeover of Guidant, which has been hurt by recent recalls of some of its implanted medical devices. Last week, Johnson & Johnson warned that negotiations had stalled and might not continue. Guidant sank $1.40 to $57.52, and Johnson & Johnson climbed 55 cents to $61.43.

Microsoft rose 35 cents to $27.01 after the New York Times said the software company has emerged as the front-runner for a stake in Time Warner Inc. unit AOL. Time Warner was unchanged at $17.61.

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