NEW YORK - US stocks rallied on Monday, driving the Dow up to a triple-digit gain, boosted by a big hospital takeover and other deals, stronger-than-expected earnings from major drug companies and gains in energy shares.
The Nasdaq rose more than 2 per cent, its biggest daily percentage gain since
June 29, and the S&P 500 Index moved back into positive territory for the year.
HCA Inc., the No. 1 US hospital chain, agreed on Monday to be bought by an investor group for about US$21 billion. The HCA deal would be one of the largest leveraged buyouts in history.
In addition, Advanced Micro Devices Inc., the No. 2 supplier of computer processors, said it would acquire graphics chip maker ATI Technologies Inc.
The earnings news lifted pharmaceutical shares, and a rise in crude oil prices drove up shares of major energy companies.
"Larger M&A transactions tend to provide greater conviction in the stock market as a whole," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles. "When you combine that with better earnings this morning from a number of different companies, people felt better about buying stocks."
Drug makers Merck & Co. and Schering-Plough Corp. both reported earnings that beat analysts' estimates.
The Dow Jones industrial average rose 182.67 points, or 1.68 per cent, to end at 11,051.05. The Standard & Poor's 500 Index climbed 20.62 points, or 1.66 per cent, to finish at 1,260.91. The Nasdaq Composite Index advanced 41.45 points, or 2.05 per cent, to close at 2,061.84.
The S&P 500 Index is now up 1 per cent for the year.
Advancers outpaced decliners on the New York Stock Exchange by more than 4 to 1, with 2,756 stocks advancing and 600 issues declining. On the Nasdaq, about three stocks rose for every one that fell.
James said the market remains relatively oversold despite a big rally last Wednesday, which was sparked by comments from Federal Reserve Chairman Ben Bernanke, who suggested the central bank was close to ending its two-year campaign of raising interest rates.
Stocks have been struggling to break and hold above key support levels after a five-week sell-off through late May sent major indexes into oversold territory.
But crude oil prices rose, with Nymex September crude up 62 cents to settle at US$75.05 a barrel, after the White House said that an immediate cease-fire in the Middle East conflict was unenforceable.
Shares of Exxon Mobil Corp., the world's largest publicly traded oil company, gained 2.2 per cent, or US$1.43, to settle at US$65.36 and topped the list of advancers in the S&P 500. Exxon Mobil also was among the major positive influences on the Dow.
HCA's stock rose 3.4 per cent, or US$1.61, to US$49.48 on the New York Stock Exchange.
ATI shares soared 18.8 per cent, or US$3.11, to US$19.67 and were among the Nasdaq's top percentage gainers, while AMD's stock fell 4.8 per cent, or 87 cents, to US$17.39 on the NYSE.
Shares of ATI rival Nvidia Corp. surged 10.1 per cent, or US$1.79, to US$19.56 on Nasdaq.
Shares of Merck shot up 4.3 per cent, or US$1.59, to US$38.95 and ranked among the major gainers in both the Dow and the S&P 500, while Schering-Plough gained 5.7 per cent, or US$1.10, to US$20.55.
An index of drug stocks rose 2.3 per cent.
Late in the session, the New York Stock Exchange instituted upside trading curbs, which require that all programme buying of S&P 500 stocks must be on a down-tick, as US stocks extended gains.
Trading was fairly active on the NYSE, with about 1.58 billion shares changing hands, slightly below last year's daily average of 1.61 billion, while on Nasdaq, about 1.94 billion shares traded, above last year's daily average of 1.80 billion.
- REUTERS
NEW YORK - US stocks rallied on Monday, driving the Dow up to a triple-digit gain, boosted by a big hospital takeover and other deals, stronger-than-expected earnings from major drug companies and gains in energy shares.
The Nasdaq rose more than 2 per cent, its biggest daily percentage gain since
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