Stock markets in the United States rallied today, driven by positive momentum from technology and small cap stocks amid acquisition activities, which increased investors’ confidence in the country’s economy.

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The 41 companies listed in the Dow Jones Internet Index climbed. The index gained 3% after declining 3.6% last week.

“The global economy is accelerating, central banks are dovish, companies are making acquisitions and it’s hard to see what could keep the market down from here. It’s also comforting to know that policy makers in China will support the economy and they still have a lot of room for maneuver,” said Allan von Mehren, chief analyst at Danske Bank A/S, as quoted by Bloomberg.

On the other hand, Terru Morris, a senior equity manager at National Penn Investors Trust Co., noted that some of the stocks that were hard-hit over the past two weeks rebounded slightly today. He added, “We’ve had a big divergence between large cap versus small cap and growth versus value. If you look at the Russell 2000 and some of the technology or Internet-related stocks, they’ve really taken a pounding.”

Last week Twitter Inc. (NYSE:TWTR) declined 18%, Yahoo! Inc (NASDAQ:YHOO) dropped 8.4%, and Facebook Inc (NASDAQ:FB) fell 5.3%. Twitter’s stock price rose almost 6%, climbing to $34.01 per share today; Yahoo gained 2%, rising to $34.45 a share. Facebook rose more than 4% to stop at $59.83 per share at the end of regular trading today.

Richard Hunter, head of equities at Hargreaves Landsdown Plc (LON:HL), opined that profits of companies exceeded expectations during the recent quarterly earnings season and that the outlook of the U.S. economy is becoming increasingly positive.

U.S. Markets

  • Dow Jones Industrial Average (DJIA)- 16,695.47 (+0.68%)
  • S&P 500- 1,896.65 (+0.97 %)
  • NASDAQ- 4,143.86 (+1.77%)
  • Russell 2000- 1,896.65 (+2.40%)

European Markets

  • EURO STOXX 50 Price EUR- 3,206.97 (+0.72%)
  • FTSE 100 Index- 6,851.75 (+0.55%)
  • Deutsche Borse AG German Stock Index DAX- 9,702.46 (+1.26%)

Asia-Pacific Markets

  • Nikkei 225- 14,149.52 (-0.35%)
  • Hong Kong Hang Seng Index- 22,261.61 (+1.89%)
  • Shanghai Shenzhen CSI 300 Index- 2,180.05 (+2.16%)

Stocks in Focus

The stock price of Pinnacle Foods Inc (NYSE:PF) surged more than 13%, rising to $34.49 per share after the company agreed to be acquired by Hillshire Brands Co (NYSE:HSH) for approximately $4.3 billion in cash and stock. Pinnacle shareholders will receive $18 in cash and 0.5 shares for each of its stock, which is equivalent to an acquisition price of $38.48 per share, a 20% premium to its closing price last Friday. Shares of Hillshire Brands declined more than 3% to $35.76 per share today.

RadioShack Corporation (NYSE:RSH) gained more than 4%, rising to $1.39 per share after Standard General increased its stake in the electronics retailer from 4.83% to 9.8%. Last week RadioShack abandoned its plan to close 1,100 stores after two of its largest creditors refused to support the closures.

The stock value of TripAdvisor Inc (NASDAQ:TRIP) surged almost 6%, increasing to $89.51 per share after the company reported better-than-expected earnings for the first quarter. The company delivered adjusted earnings of 48 cents per share and $281 million in revenue. Its earnings beat the adjusted earnings of 46 cents per share estimated by Zacks Equity Research, but its revenue was slightly lower than the $282 million forecast by the firm.