Merger and acquisition news from companies as diverse as Yahoo Inc., Cognos Inc., and MetroPCS Communications Inc. heated up IT investor interest this week, shoring up confidence in the sector even as credit-market concerns continued to buffet the stock exchanges.

After wireless carrier MetroPCS proposed a merger valued at about US$5.5 billion with rival Leap Wireless, its share price Tuesday spiked $1.36 to close at $28.65. Brokerage Jefferies & Co. Wednesday then upgraded its rating on the stock from "hold" to "buy," sparking another uptick in the company's share price. Though the merged company would have about 6.2 million customers, a far cry from the 50 million-plus subscriber base that market leaders like AT&T and Verizon have, the combined company would be the fifth largest in the U.S., with a national footprint.

Meanwhile, investor faith in the beneficial effects of mergers was underscored by share-price increases in all the major acquiring companies this week. Often, the acquiring company stock takes a hit because acquisition costs are usually expected to dilute earnings for a while.

Business performance software vendor Cognos Inc. Wednesday said it agreed to pay $339 million for Applix Inc., a developer of performance analysis software. The company has an aggressive plan to integrate Applix's products by early next year. Company shares jumped by $0.18 to close at $41.08 Wednesday, rising further on Thursday as brokerage JPMorgan raised its rating on the shares, saying that underlying demand for the Cognos' software and services is strong. JPMorgan also said that gross margins on product sales at Cognos should also benefit from the Applix acquisition.

Yahoo Inc. meanwhile continues to pursue its strategy of scooping up companies in the online advertising market, Wednesday announcing a $300 million purchase of BlueLithium Inc. BlueLithium's banner advertising network should help expand Yahoo's ad reach. The news sparked shares to rise by $0.13 to close at $24.10.

Also this week, IP-based communications technology company Telanetix Inc. announced it would buy VOIP company AccessLine Communications for up to $34.9 million in cash and stock, and Oracle Corp. continued its buying spree. Oracle snapped up Netsure Telecom Ltd., a provider of network intelligence and network data integrity software, and Bridgestream Inc., a maker of software that helps companies map employee responsibilities, for undisclosed amounts.

The IDG News Service is a Network World affiliate.