On The Fly: Top Stock Stories For Monday, Oct. 24

Stocks opened in positive territory thanks in part to the M&A activity over the weekend and the optimism of investors surrounding the earnings season. This week marks the busiest week for reporting and includes bellwethers from multiple industries, such as Apple (AAPL), General Motors (GM), and Merck (MRK). The averages found their levels shortly after the open and moved in a narrow range for the rest of the session as investors readied for the earnings blitz coming tonight and tomorrow morning.

Economic news

In the U.S., the Chicago Fed National Activity index rose to -0.14 in September. Markit's flash manufacturing PMI jumped 1.7 points to 53.2 in October, above the expected reading of 51.2.

Consumer Reports, in its Annual Auto Reliability Survey, said Toyota (TM) and Lexus topped his list of the most reliable brands again.

Chicago Federal Reserve Bank President Charles Evans suggested that the Fed may need to keep interest rates lower for longer to convince investors and the public that the central bank is serious about reaching its 2% inflation target.

In Europe, the Markit's flash PMIs for the Eurozone were stronger than expected. The manufacturing PMI of 53.3 topped the 52.7 forecast, services at 53.5 beat the Street's 52.4 expectation, and the composite reading of 53.7 topped the forecast for a reading of 52.8.

Japan's flash manufacturing PMI was solid as well, rising to 51.7 from 50.4 in September.

Company news 

Shares of AT&T (T) and Time Warner (TWX) dropped 1.7% and 3%, respectively, after the telecom and media giants entered into a definitive agreement under which the former will acquire the latter in a stock-and-cash transaction valued at nearly $109B, including Time Warner's net debt. The news sparked not only political criticism but also some downgrades of both stocks by Wall Street analysts, several of whom are bearish on the deal.

The M&A news continued with Rockwell Collins (COL) agreeing to acquire B/E Aerospace (BEAV) for approximately $6.4B in cash and stock, plus the assumption of $1.9B in net debt.

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