Stocks rise after strong earnings, deal news

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By Associated Press

NEW YORK (AP) — Strong earnings results and another round of corporate deals led stocks higher Wednesday.

Family Dollar rose 24 percent in early trading after activist investor Nelson Peltz's firm offered to pay up to $60 a share to take the discount retailer private. That was a 36 percent premium from Tuesday's closing price. Family Dollar rose the most of any stock in the Standard & Poor's 500 index.

Genzyme rose nearly 2 percent after French drug maker Sanofi-Aventis agreed to buy the U.S. biotechnology firm in an all-cash deal that valued the company at $20.1 billion. The deal ended months of corporate haggling between the two companies.

Dell Inc. rose 9 percent a day after the personal computer maker raised its revenue forecast for the fiscal current year, a sign that businesses are spending more on computers, servers and other technology.

Abercrombie & Fitch Co. rose 6 percent after the preppy teen clothing maker said its fourth-quarter net income nearly doubled on strong sales overseas and better U.S. results.

Comcast Corp. also reported earnings that surpassed analysts' expectations. Its stock rose 3 percent after more customers signed up for a combination of TV, high-speed Internet access and digital phone services.

Deere & Co. rose 4 percent after the equipment maker said its net income more than doubled, thanks to growing sales of large farm machinery in the U.S. and Canada.

In early trading, the Dow Jones industrial average rose 57, or 0.3 percent, to 12,283.

The Standard & Poor's 500 index rose 7, or 0.5 percent, to 1,335. The Nasdaq composite index rose 17, or 0.6 percent, at 2,821.

The yield on the 10-year Treasury note remained unchanged at 3.61 percent from late Tuesday.

The Commerce Department reported that new home construction rose by the largest amount in 20 months. The pace of construction is still way off from levels seen in a healthy economy, but market analysts were optimistic about the report.

"Housing is slowly showing some signs of life here," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.

The Labor Department also reported that wholesale prices rose sharply in January due to higher costs for gas and other goods. The Federal Reserve reported separately that factories produced more goods for the fifth straight month in January, although overall industrial production fell.