U.S. stocks ended higher on Tuesday, cheered by better-than-expected January spending data and sustained merger activity, with Circuit City the latest company to become the target of a takeover bid.
Retail sales dipped 0.3 percent in January, as a drop in demand for cars offset strength at clothing and department stores. Spending was powered mostly by consumers using holiday gift cards. Although U.S. retail sales dropped in January, the decline was said to be smaller than expected.
Investors welcomed reports that a private investment firm had made an unsolicited bid for struggling electronics retailer Circuit City Stores Inc. Circuit City, the number. two U.S. consumer electronics chain, said it had received an unsolicited takeover offer for $3.25 billion, or $17 per share, from Highfields Capital Management LP.
The Dow Jones Industrial Average was up 46.19 points, or 0.4 percent, at 10,837.32. The Standard & Poor’s 500 Index was up 3.98 points, or 0.3 percent, at 1,210.12. The Nasdaq Composite Index was up 6.30 points, or 0.3 percent, at 2,089.21.
Among local companies, shares of Jacobs Engineering Group Inc. gained 3.7 percent, or $1.90, to close at $53.40 after the Pasadena-based construction services company announced that two of its subsidiaries received contracts.
IHOP Corp. rose 4.5 percent to $47.26 after the Glendale-based company secured agreements for its franchisees to build 56 new IHOP restaurants over the next seven years.
On the down side, shares of Youbet.com Inc. lost 7.0 percent to close at $5.20 after the Woodland Hills-based online horse race wagering announced earnings after the market close on Monday. The company reported net income of $535,372 (2 cents per diluted share) for the fourth quarter ended Dec. 31, versus a loss of $1.2 million (4 cents) for the year-ago period. Revenue rose 14 percent, to $16.2 million.
And Northrop Grumman Corp. dipped 0.5 percent to $53.97 after the L.A.-based firm’s stock rating was cut to “buy” from “strong buy” by Davenport & Co. The price target was set at $62.50 per share.
