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Saturday December 14th, 2019 10:16AM

Stocks inch up on chipmaker deal talks; oil hits 2-year high

By The Associated Press
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NEW YORK (AP) — U.S. stocks are rising Monday as upheaval in oil-rich Saudi Arabia sends crude prices to two-year highs, while technology companies climb as investors evaluate potential tie-ups between chipmakers. Broadcom's $103 billion offer for competitor Qualcomm would be the largest deal in technology industry history if completed. Phone companies are sinking after wireless carriers Sprint and T-Mobile said they've called off talks on a possible merger, while Sprint's parent company is reportedly considering an offer for cable company Charter.

KEEPING SCORE: The Standard & Poor's 500 index rose 4 points, or 0.2 percent, to 2,592 as of 2:50 p.m. Eastern time. The Dow Jones industrial average added 26 points, or 0.1 percent, to 23,565. The Nasdaq composite gained 22 points, or 0.3 percent, to 6,786. All three indexes closed at record highs Friday. The Russell 2000 index of smaller-company stocks picked up 3 points, or 0.2 percent, to 1,498.

CHIP, CHIP HOORAY: Broadcom made an unsolicited offer for Qualcomm worth $103 billion, or $70 a share. Qualcomm stock has been battered this year as the company is stuck in a legal battle with its biggest customer, Apple. The iPhone maker has refused to pay any royalties to Qualcomm for some of the smartphone's features.

Qualcomm added $1.43, or 2.3 percent, to $63.24 and Broadcom rose $1.05 to $274.68. Qualcomm stock has jumped 15 percent since Thursday. Apple also rose $2.45, or 1.4 percent, to $174.95 as technology companies made big gains. Some analysts expect Apple to have a lot of sway over the Qualcomm-Broadcom deal.

That wasn't the only potential chip tie-up in the news. After the Wall Street Journal reported that Marvell Technologies is in talks to buy Cavium, Cavium advanced $7.58, or 11.1 percent, to $75.85 and Marvell rose $1.72, or 9.3 percent, to $20.24.

THE QUOTE: Doug Coté, Chief market strategist for Voya Investment Management, said that in recent years, companies combined so they could survive the aftermath of the economic crisis of 2008-09. But now that the global economy is doing much better, they're merging for different reasons.

"Global economic growth is expanding somewhat rapidly and the M&A is looking to capitalize on the growth areas, in particular technology," he said. "Any capital investment cycle will begin with technology."

DROPPED CALL: Wireless carriers Sprint and T-Mobile dashed investors' hopes they'd combine. On Saturday the companies said they'd called off merger negotiations for the foreseeable future because they couldn't strike an agreement beneficial to customers and shareholders. The two companies have been dancing around a possible merger for years and in recent weeks investors felt they might finally combine.

Sprint fell 69 cents, or 10.3 percent, to $5.98 and T-Mobile sank $3.51, or 6 percent, to $55.40.

Verizon dropped $1.93, or 4.1 percent, to $45.49 and AT&T slid 53 cents, or 1.6 percent, to $32.77. That came after new reports that Japanese conglomerate SoftBank, which owns Sprint, is interested in buying cable provider Charter Communications. CNBC reported on those talks Monday while the New York Post said last week that the companies had recent talks about a deal. Connecting Sprint and Charter, the country's second-largest cable company, could mean cost savings, deeper pockets and a combined wireless-home internet company that could act as a stronger competitor to AT&T and Verizon.

ENERGY: U.S. crude oil surged $1.71, or 3.1 percent, to $57.35 a barrel in New York, its highest price since mid-2015. Brent crude, the international standard, climbed $2.20, or 3.5 percent, to $64.27 a barrel in London. Oil drilling service companies made big gains. Schlumberger jumped $3.28, or 5.2 percent, to $66.86 and Baker Hughes surged $2.51, or 8.1 percent, to $33.69. Elsewhere, Chevron picked up $1.85, or 1.6 percent, to $116.84.

Turmoil in Saudi Arabia had investors wondering if oil supplies will be constricted, which would drive crude prices higher. Over the weekend 11 princes and 38 senior officials and businessmen were arrested as part of a purported anti-corruption probe led by Crown Prince Mohammed bin Salman. Those arrested include Prince Alwaleed bin Talal, the billionaire chairman of the Kingdom Holding Co. Separately, a high-ranking prince and several other government officials were killed when a helicopter crashed in the south of the kingdom.

SEEKING SAFETY: With international tumult in the news, investors bought gold and government bonds. Gold rose $12.40, or 1 percent, to $1,281.60 an ounce. Silver jumped 40 cents to $17.24 an ounce. Copper climbed 4 cents to $3.16 a pound.

The yield on the 10-year Treasury note slipped to 2.31 percent from 2.33 percent.

OTHER ENERGY TRADING: Wholesale gasoline added 4 cents to $1.83 a gallon. Heating oil rose 6 cents to $1.94 a gallon. Natural gas jumped 15 cents, or 5 percent, to $3.13 per 1,000 cubic feet.

CURRENCIES: The dollar dipped to 113.79 yen from 114.16 yen. The euro rose to $1.1612 from $1.1608.

OVERSEAS: In Britain, the FTSE 100 made a tiny gain while France's CAC 40 shed 0.2 percent. The German DAX also dipped 0.1 percent. Japan's Nikkei 225 made a tiny gain and South Korea's Kospi dropped 0.3 percent. Hong Kong's Hang Seng index lost less than 0.1 percent.

___

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jayt

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