Stocks Soar as Investors Cheer M&A Deals
Stocks snapped a three-day losing streak Monday as investors cheered a wave of merger-and-acquisition activity.
The Dow Jones Industrial Average rose 124.17, or 1.3 percent, to close at 9,789.36. The S&P 500 gained 1.8 percent and the Nasdaq advanced 1.9 percent.
Xerox announced plans to buy Affiliated Computer Servicesin a deal valued at $6.4 billion. The move is aimed at taking Xerox beyond a document-management business and into technology outsourcing and data management.
Xerox shares skidded 15 percent, while ACS shares jumped 14 percent.
Shares of Abbott Laboratories rose 2.6 percent after the company agreed to buy the drugs unit of Belgian conglomerate Solvay for $6.6 billion in cash.
The Xerox deal comes a week after Dell agreed to buy Perot Systems for $3.9 billion.
"The tech sector is going to be one of the first beneficiaries of an economic rebound," Kenny said. "The fact that these deals are in the tech sector is a further piece of the recovery puzzle."
Apple shares rose 2.1 percent as the iPhone is going global: It will be available in China starting in October for about $730. It will reach France later this year.
Cisco shares rallied 4.4 percent, making them the biggest percentage gainer on the Dow, after Barclays raised its rating on the stock to "overweight," saying it expects accelerating U.S. demand to drive revenue growth.
Tech stocks were mostly higher, with the Nasdaq outperforming the broader indexes, but Research In Motion continued to slide, losing another 3.6 percent, after the company's disappointing results last week.
Johnson & Johnson shares gained 1.1 percent after the health-care products company bought an 18 percent stake in Dutch biotech company Crucell for $444 million as part of a flu-vaccine development deal.
GenTek shares soared 40 percent after the chemical and engine-components maker agreed to a $411 million takeover bid from a subsidiary of private-equity firm American Securities.
Kraft shares fell following a report in the Observer that the company may launch a hostile bidfor Cadbury, valuing the UK confectionary business at around $17.6 billion.
The dollar fell to an 8-month low against the yen in early hours after Japanese officials initially waved off any plans to stem the yen's rise. But later, Finance Minister Hirohisa Fujii said that he never approved of a strong yen.
Bank stocks posted solid gains, with Bank of America up 3.7 percent and Citigroup up 4.3 percent. And insurance-stocks soared: American Express gained 4.1 percent, while Hartford Financial shot up 11 percent.
Goldman Sachs gained 1.7 percent after the brokerage confirmed earlier reports that it plans to recruit up to 200 people for its asset-management business.
Volume was light given the Jewish holiday of Yom Kippur, with about 979.3 million shares changing hands on the New York Stock Exchange. Advancers outpaced decliners, roughly 4 to 1.
TUESDAY: Case-Shiller home-price index; consumer confidence; Fed's Plosser speaks; Earnings from Walgreens
WEDNESDAY: Weekly mortgage applications; ADP jobs report; GDP; weekly crude inventories; Fed's Lockhart speaks
THURSDAY: Personal income/spending; jobless claims; ISM manufacturing index; pending-home sales; construction spending; auto sales; Fed's Bernanke, Pianalto, Lockhart speak
FRIDAY: Sept jobs report; factory orders; Calif. IOUs mature
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