June 16 - Deals lift stocks, but Iraq jitters cap gains; GM ups recall charge; New Alibaba IPO details; IMF cuts U.S. growth forecast. Bobbi Rebell reports.
Stocks held their ground in the first trading session on the week. A wave of merger deals lifting sentiment- but worries about Iraq tempering gains. The major indexes closing higher- with the Dow Utilities index hitting an all-time high. During Monday's session, crude oil futures pushed higher in choppy trading- on concerns about a potential disruption to oil exports. But traders booked profits and it closed lower. Just before the market closed, General Motors said it is going to rework or replace ignition keys on more than three million cars. That ups the charge it's going to take from $400 to $700 million. Shares were slightly higher. A healthy dose of dealmaking: U.S. medical device maker Medtronic buying Dublin-based Covidien. For the $43 billion dollar price tag it also gets access to Covidien's Irish tax status. Medtronic will move its headquarters there, and expects to save about $250 million in taxes per year. Medtronic lost a little ground but shares of Covidien shot up on the news. Level 3 is buying internet services provider TW telecom for $5.6 billion. The cash and stock deal aimed at helping it expand its commercial fiber network in the U.S. Shares of Fusion-io surging on news it's being bought by Sandisk for about $1.1 billion. The deal helps Sandisk boost its flash storage business. It also cuts its exposure to the volatile memory chip market. New details about the Alibaba initial public offering. Four independent directors have been asked to join the nine member board of directors- including Yahoo founder Jerry Yang and J. Michael Evans, former Vice Chairman of Goldman Sachs. They also disclosed some new stats. Tmall, often compared to Amazon, saw gross merchandise volume up 90 percent year on year in the quarter ended in March. Mobile transactions were around 27 percent. The International Monetary Fund cut its growth forecast for the U.S. on Monday- citing the harsh winter. It said the economy would not reach full employment until the end of 2017. That gives the Fed a little more breathing room before raising rates. IMF Chief Christine Lagarde: SOUNDBITE: CHRISTINE LAGARDE, MANAGING DIRECTOR OF THE INTERNATIONAL MONETARY FUND SAYING: "Extreme weather occurrences have a serious effect on the economy. Extreme weather occurrences have repeated much more frequently in the last 20 years than they had in the previous century and I think that's a valid reason to wonder about climate change and how to deal with it." Other economic news was positive. Manufacturing output rose in May, and factory activity in New York State accelerated sharply this month. And the National Association of Home Builders/Wells Fargo index of homebuilder confidence rose to 49 in June- just a point below the level that indicates favorable conditions. European stocks lost ground, adding to last week's retreat. Violence from Iraq prompting investors to take profits.