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US: Stocks dip as Virgin America surges on takeover

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[NEW YORK] Wall Street stocks opened modestly lower Monday as Virgin America surged more than 40 per cent on news it agreed to be acquired by Alaska Airlines in a US$4 billion deal.

Five minutes into trade, the Dow Jones Industrial Average stood at 17.771.20, down 21.55 points (0.12 per cent).

The broad-based S&P 500 shed 2.76 (0.13 per cent) to 2,070.02, while the tech-rich Nasdaq Composite Index fell 4.93 (0.10 per cent) to 4,909.62.

Virgin jumped 40.0 per cent to $54.47 after Alaska Air Group said it would buy the US arm of Richard Branson's airline at $57 a share, a strong premium over Friday's close of $38.90.

The merger will form a company with combined annual revenues of around US$7 billion. Alaska Air lost 5.0 per cent.

Key data releases this week include the Institute for Supply Management's reading of the US services sector, as well as minutes from the March Federal Reserve policy meeting.

AFP

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