Why the Dow Hit a New Record and Twitter and DirecTV Soared

Stocks roared to record highs today, climbing steadily over the course of the day as both the Dow Jones Industrial Average  (DJINDICES: ^DJI  ) and the S&P 500 finished at all-time highs, closing up 0.7% and 1%, respectively. Meanwhile, the tech-heavy Nasdaq was the biggest gainer of the three, climbing 1.8% on a rebound in momentum stocks after last week's decline. Today's gains came without any noteworthy news item driving the buying, as there were no major economic reports or earnings releases out today. There was one merger of note: Hillshire Brands, the parent of Jimmy Dean and Sara Lee, said it will acquire Pinnacle Foods for $4.3 billion. Pinnacle owns household names such as Hungry Man and Aunt Jemima. Its shares rose 13%. 

In international affairs, investors shrugged off a vote in Eastern Ukraine by separatists in favor of autonomy as Western governments called the referendum illegal and even Russia shied away from fully endorsing it. Tensions in Ukraine have weighed on the markets in the past, and the situation merits continued attention. No violence seems to have followed yesterday's vote, however, as armed conflict seems to be the market's greatest concern.

Turning to individual stocks, Twitter  (NYSE: TWTR  ) finished up 6% today after scoring an analyst upgrade. The beaten-down social-media stock has fallen sharply over the past couple of weeks after a disappointing earnings report and a sell-off following the expiration of its lockup period. Today, Twitter got a lift from SunTrust analyst Robert Peck, who bumped up his rating from "neutral" to "buy," saying that the assumption in the market that Twitter has to match Facebook's size is misguided and that the stock has room to advance even with user growth decelerating. I would tend to agree with Peck as the fixation on Twitter's user growth seems exaggerated. With about 250 million users, Twitter certainly doesn't lack eyeballs. The challenge for it now is to monetize those users, a process it has only just begun. Considering revenue more than doubled in its most recent report, the company seems to be on the right track.

After hours, shares of DirecTV (NASDAQ: DTV  ) were up 6% on reports that it was in advanced talks to be purchased by AT&T  (NYSE: T  ) . Rumors of a possible deal last week caused shares to spike 4%, and sources have now slapped a $50 billion price tag on the deal, more than a 10% premium on DirecTV after-hours trading price. The source said a deal could be announced within two weeks, and is just the latest example of consolidation in the cable market following Comcast and Time Warner Cable's proposed tie-up. The deal is also likely to promote more consolidation in the industry, meaning a buyer could come knocking for DISH Network or a smaller cable provider.

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