New York

Wall Street gains ahead of earnings reports

NEW YORK — Wall Street edged higher in an erratic session Monday as investors were reassured by a drop in Treasury bond yields yet still remained cautious as second-quarter earnings season kicks off this week.

Investors were looking to corporate earnings to help give the market some direction in the coming weeks.

In the meantime, Wall Street found some solace as the yield on the benchmark 10-year Treasury note dipped to 5.16 percent from 5.18 percent Friday. There had been some concern that the steady rise in bond yields since June would crimp dealmaking.

Buyout activity continued Monday after Apollo Management LP's Hexion Specialty Chemicals Inc. raised its takeover bid for chemical company Huntsman Corp.; Barron's said FedEx Corp. might be the target of a buyout; and Coventry Health Care Inc. agreed to acquire Florida Health Plan Administrators LLC, owner of Vista Healthplans, for $685 million. A continuum of takeovers has given the stock market support in recent months.

"There's just not much earnings or economic news out there, and that has the market bobbing and weaving a little bit," said Jay Suskind, head trader at Ryan Beck & Co. "Overall, there's not a real catalyst to move the market one way or another, and I think the market will hover close to home."

The Dow Jones industrials rose 38.29, or 0.28 percent, to 13,649.97. The blue chip index came within about 7 points of its record close of 13,676.32 before falling back. Broader market indexes were also higher. The Standard & Poor's 500 index rose 1.41, or 0.09 percent, to 1,531.85, and the Nasdaq composite index added 3.51, or 0.13 percent, to 2,670.02.

Monday was a light day for economic data. The Federal Reserve reported that consumer credit rose at an annual rate of 6.4 percent in May, far above the small 1.1 percent gain of April and about double what analysts had been expecting. For May, consumers increased borrowing by $12.9 billion to a record $2.44 trillion. Economists had forecast that consumer borrowing would rise by a much smaller $6.5 billion.

Investors will be watching crude oil prices, which have been trading at their highest levels since August. A barrel of light sweet crude fell 62 cents to $72.19 on the New York Mercantile Exchange.

Topps shareholders urged to reject buyout

NEW YORK — Baseball card and bubblegum maker Topps Co.'s board of directors Monday unanimously urged its shareholders to reject a tender offer from Upper Deck and said the proposal wasn't in the best interests of shareholders.

New York-based Topps said terms of the tender offer are "substantially similar" to the acquisition proposals submitted by Upper Deck to Topps on April 12 and May 21.

In May, Upper Deck, a Carlsbad, Calif., sports and entertainment publishing company, offered $10.75 per share for Topps. The deal now is valued at $416.7 million based on 38.8 million outstanding shares as of June 27.

Topps said Monday that it plans to continue talks with Upper Deck to see if a consensual deal that is superior to the pending transaction with Tornante Co. and Madison Dearborn Partners LLC can be reached.

On March 5, Topps agreed to be acquired by the privately held Tornante and Madison Dearborn for $9.75 a share in cash, or about $378 million based on outstanding shares as of June 27. Topps said Monday that its board has not changed its recommendation about the offer.

Topps shareholders were scheduled to vote June 28 on the proposed acquisition by Tornante and Madison Dearborn. However, the Delaware Court of Chancery made Topps postpone its vote to let Upper Deck make a tender offer.

California

Google to buy e-mail security specialist

SAN FRANCISCO — Google Inc. is buying e-mail security specialist Postini Inc. for $625 million, fortifying the Internet search leader's effort to sell online software services to corporate customers seeking alternatives to Microsoft Corp.'s long-dominant products.

The all-cash deal announced Monday is aimed at reassuring large businesses that have had qualms about entrusting Google to oversee their e-mail systems and other vital applications because of security concerns.

Google began selling companies a low-cost suite of online software that includes e-mail, calendaring and word processing in February, hoping to diversify its revenue beyond Internet advertising and perhaps siphon money away from Microsoft, one of its biggest rivals. Microsoft is trying to challenge Google in the rapidly growing Internet ad market by drawing upon the cash that it has amassed from its market-leading Office suite of software applications and Windows operating system that controls most personal computers.

Bus strike disrupts commute for thousands

SANTA ANA — The first Orange County bus strike since 1986 disrupted the commutes of thousands of riders Monday after 1,100 transportation workers walked off the job.

Companies sought to help employees cope by setting up car-pool hotlines and other resources. About 70 percent of Orange County Transportation Authority riders don't have access to cars and half are members of families making $22,000 a year or less, according to the agency.

The strike began at 12:01 a.m. Saturday after union leaders rejected a salary increase and 30-day contract extension for drivers. Only 31 of the county's 81 bus lines were still running, most of them short routes and rail feeders operated by a subcontractor. One of the major routes still running was being driven by managers who are licensed bus operators.

Both sides agreed Monday morning to resume negotiations later in the day.

Washington, D.C.

Alzheimer's skin patch gets federal OK

The first skin patch to treat the dementia that can plague Alzheimer's patients gained federal approval, a drug company said Monday.

The drug in the patch, called Exelon or rivastigmine, is the same as that now available in capsule form but provides a regular and continuous dose throughout the day, according to Novartis Pharmaceuticals Corp. Since the drug enters the bloodstream directly, the patch eliminates some gastrointestinal side effects associated with the drug when swallowed.

The drug is meant to treat the symptoms of mild to moderate dementia in patients with Alzheimer's. It also won Food and Drug Administration approval to treat patients with mild to moderate Parkinson's disease dementia, Novartis said.

France

Danone seeks to buy baby food maker

PARIS — Groupe Danone SA, maker of Dannon yogurt and Evian waters, is strengthening its baby food business with a bid Monday to buy Royal Numico NV for $16.8 billion.

The addition of Numico would make Danone one of the world's largest players in the fast-growing $24 billion baby food industry. Groupe Danone is offering $75 per share, a 44 percent premium over the average share price over the last three months, the two companies said.

Netherlands-based Numico said its board would recommend that shareholders accept Danone's offer.

— From wire reports