Merger talk boosts Reynolds, Time Warner, Wall St ends flat

Megamerger buzz returned to Wall Street Friday on a mixed day for US stocks, with shares of Time Warner and Reynolds American both surging on news of possible takeover deals.

Tobacco giant Reynolds American shot up 13.8 percent after British American Tobacco launched a $47 billion bid to buy the 58 percent of the company it does not yet own.

Time Warner soared 7.8 percent as the Wall Street Journal reported that telecom giant AT&T was in advanced talks to acquire the entertainment group. AT&T fell 3.1 percent.

Microsoft jumped 4.3 percent to top its December 1999 record high after it reported a better than expected $4.7 billion in net profit.

The Dow Jones Industrial Average shed 0.1 percent to 18,145.71.

The broad-based S&P 500 lost less than 0.1 percent at 2,141.16, while the tech-rich Nasdaq Composite Index gained 0.3 percent to 5,257.40.

Dow member McDonald's advanced 3.0 percent after reporting better-than-expected earnings as strong comparable sales growth in Britain, Japan and some other overseas markets offset slowing growth in the US.

General Electric, another Dow member, lost 0.3 percent as the industrial giant lowered its 2016 earnings growth forecast following a 20 percent dip in third quarter earnings to $2.0 billion.

PayPal surged 10.1 percent after reporting a 7.3 percent increase in third quarter earnings to $323 million with active customer accounts rising 11 percent to 192 million.

Biotech shares were under pressure, with Amgen losing 1.9 percent, Biogen 3.0 percent and Celgene 1.1 percent.