Merger Rumors Send Stocks Higher: OfficeMax Incorporated (OMX), UnitedHealth Group Inc (UNH)

When companies are in the mood to buy other companies, it’s usually a sign that corporate profits are in for an upswing. The mere rumor of such a merger had the Dow Jones Industrial Average over 14,000 again, up 0.35% on the day, while the S&P 500 rose 0.63% to a five-year high.

OfficeMax Inc (NYSE:OMX)I’m not sure a potential merger between OfficeMax (NYSE:OMX) and Office Depot (NYSE:ODP) is exactly a sign of more retail acquisitions to come, but it’s a start. The two companies have been crushed by online retailers with lower costs, and they’re competing for a finite market. It makes all the sense in the world for the two to become one stronger company with fewer locations. The market is hoping this will lead to more consolidation in the industry, but only time will tell. This Fool isn’t even certain a super office-retailer isn’t doomed before it gets started.

Shares of Cisco have jumped 1.9% to a new 52-week high during trading today. CEO John Chambers has said his company won’t pursue acquisitions in the U.S. because most of its cash bounty is in foreign countries. Cisco’s stock has been stuck in neutral for about a decade now, and while this new high is a plus, I wouldn’t expect it to drive the stock significantly higher in the near term.

UnitedHealth Group (NYSE:UNH) has led the laggards on the Dow today, falling 1.6% as potential government cuts put pressure on the company. The Centers for Medicare and Medicaid Services said it expects costs per person for Medicare Advantage plans to fall 2% in 2014. Final rates aren’t out yet, but any cuts would eat into sales and margins for insurers, hence today’s drop.

The article Merger Rumors Send Stocks Higher originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. The Motley Fool recommends Cisco Systems (NASDAQ:CSCO) and UnitedHealth Group.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!