Stocks ended higher on Monday after investors reacted to a favorable court ruling for cigarette makers and General Motors Corp.’s deal with the United Auto Workers union to cut its health-care costs.
The Dow Jones Industrial Average gained 60.76, or 0.6 percent, to 10,348.10. The Standard & Poor’s 500 Index rose 3.53, or 0.3 percent, to 1,190.10. The Nasdaq Composite Index added 5.47, or 0.3 percent, to 2,070.30.
Shares of tobacco producers jumped after the U.S. Supreme Court rejected a Justice Department appeal in the government’s racketeering case against cigarette makers, potentially saving the industry from paying $280 billion in penalties.
And GM soothed worried investors after the struggling car maker said its pact with the UAW would reduce its employee health-care expenses by $3 billion annually before taxes. Cash savings are estimated at $1 billion per year.
Among local companies, shares of Mattel Inc. lost 4.5 percent to $15.23 after the El Segundo-based toymaker reported its third-quarter profit slumped 12 percent as lower Barbie sales eclipsed higher sales in much of the rest of its product portfolio. The results dipped below analysts’ earnings estimates of 61 cents per diluted share.
Hilton Hotels Corp. fell 2.2 percent to $19.52 after Moody’s Investors Service said it may have to cut the Beverly Hills-based hotelier’s credit ratings if the company buys the lodging unit of Britain’s Hilton Group Plc. The outlook on Hilton Hotels was changed to “developing” from “stable,” the ratings company said in a statement. On Friday, Hilton Hotels said it was in discussions to acquire the hotel division of Hilton Group, in an all-cash deal reported to be worth about $6.3 billion.
And shares of Molina Healthcare Inc. gained 1.9 percent to $24.76 after a California Department of Health Services hearing officer set aside the department’s notice of intent to award Blue Cross of California the Medi-Cal contracts for San Bernardino and Riverside Counties contracts that have been held by Long Beach-based Molina. Molina originally lost the contracts in May when the department said the company failed to follow the requirements for the bid process.
