World stocks rose Tuesday, helped by corporate merger news and positive momentum over government pledges to support the global recovery with stimulus efforts. Gold prices rose above $1,000 to near record highs, driven by a weaker dollar and expectations of low interest rates. Germany's DAX rose 15.38 points, or 0.3 percent, to 5,478.89 while Britain's FTSE 100 gained 10.38 points, or 0.2 percent, to 4,943.56. France's CAC-40 was up 5.53, or 0.2 percent, at 3,658.36 after Asia also rallied. Wall Street likewise rose on the open. The Dow Jones industrial average gained 39.22 points, or 0.4 percent, to 9,480.49. The broader Standard and Poor's 500 index rose 6.42, or 0.6 percent, to 1,022.82, and the Nasdaq composite index rose 10.48, or 0.5 percent, to 2,029.26. A day after Kraft Foods Inc. proposed a 10.2 billion pound ($16.7 billion) takeover of Cadbury PLC – which was rejected and created speculation of an industry-wide acquisition race for the British company – major UK mobile operators said they were considering a merger. Deutsche Telekom AG and France Telecom SA said they intend to combine their British mobile phone units – T-Mobile UK and Orange UK – to form the country's biggest mobile operator. The company would have about 37 percent of the UK mobile market and revenues of 7.7 billion pounds. Jonathan Groocock, analyst at Investec Securities, said a deal could benefit the entire British mobile sector. “The final outcome would be improved market returns for all parties as margins could stabilize,” he said in a research note. The increase in corporate activity suggests an improvement in businesses' confidence and reinforces views that the worst of the global economic downturn is past. Still, many investors doubt that a strong recovery can be sustained over coming months, as unemployment continues to rise, putting pressure on households' spending.
