In the broader market, the Dow Jones Industrial Average advanced 548.62 points, or 3.15%, to close at 17,949.37. The S&P 500 rose 65.54 points, or 3.22%, to 2,102.05, while the NASDAQ composite index climbed 154.59 points, or 3.28%. Specifically, the Dow Jones US Telecommunications Index went up 4.22% to 193.49 and the S&P 500 Telecom & IT increased by 2.72% from 478.59 to 491.62, both led by a 5.89% and 5.16% gain by Comcast (NASDAQ: CMCSA) and CenturyLink (NYSE: CTL).
In the US, telecommunication companies are bulking up at the fastest rate in more than a decade, thanks to a continuing explosion of mobile data use that is hitting everything from handhelds to massive data centers, and also the networks that connect them. Accordingly, majority of the recent spate of telecom deals – apart from its own reasons for M&A — are due to the overall theme of growing data use. AT&T joined the mix when it acquired DirecTV (NASDAQ: DTV) for US$48.5 billion in July 2015, and later in August, Shenandoah Telecommunications (Shentel) (NASDAQ: SHEN) it agreed to buy Virginia based wireless telecom operator NTelos Inc (NASDAQ: NTLS).
The golden age of telco M&A looks set to continue, driven by rapid growth in internet data activity and companies that seek to expand their presence in new markets. As the sector continues to draw attention from a diverse range of investors, Mergent sees that the buying spree does not seem like it will die down that soon.
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