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Market Update

Stocks in the News: Corning

Sometimes the open highway isn't enough if you don't have the engines to drive it.

Corning Inc. [[TICKER GLW ]], one of the biggest producers of fiber-optic cable, had been missing one thing that would make it a complete player in its field--the laser pumps that push data across fiber-optic lines. In agreeing to buy Oak Industries , Corning will now have access to those pumps.

Shares of Corning hit a new 52-week high of 93 ½ before ending down 3 ¼ to 87 1/8 on merger-arbitrage-related selling. Similarly, shares of Oak Industries hit a 52-week high of 74 before closing at 68 ¾.

"This could be a great strategic move to fill Corning's product lineup" says Jeff McConnell, Morningstar analyst.

Corning announced the $1.8 billion purchase yesterday. The demand for fiber-optic cable has increased steadily as Internet applications continue to require more capacity and faster speeds. Industry analysts expect the market for fiber-optic components to grow as much as 40% a year for the next several years.

The acquisition makes Corning much more of a one-stop provider for fiber-optics customers, leaving the company well positioned to capitalize on the expected demand.