Deals Fire Up Stocks

Updated from 4:12 p.m. EDT

Wall Street started the week in an upbeat mood Monday as a new round of proposed private-equity buyouts and corporate mergers drove stocks higher.

The Dow Jones Industrial Average advanced 115.76 points, or 0.96%, to 12,226.17, and the S&P 500 rose 15.11 points, or 1.09%, at 1402.06. The Nasdaq Composite climbed 21.75 points, or 0.92%, at 2394.41.

Roughly 2.80 billion shares changed hands on the New York Stock Exchange. Advancers beat decliners by a 3-to-1 margin. Volume on the Nasdaq reached 1.70 billion shares, with winners outpacing losers 2 to 1.

Among market subsector winners was the Amex Oil Index, which rose 1.7% despite a drop in oil prices. The Amex Airline Index added 1.7%, and the Philadelphia/KBW Bank Index climbed 1%.

On the losing side, the Philadelphia Semiconductor Sector Index eased 0.6%, pressured by a 2.1% loss in Advanced Micro Devices (AMD Quote).

Stocks were propelled by a number of big deals that are either confirmed or believed to be in the works. The largest would combine Barclays and ABN Amro (ABN Quote), two European banking giants.

Together, the unified firm would have a market cap of roughly $130 billion, if a merger is in fact announced in the coming days. ABN Amro rose $5.12, or 14.1%, to $41.36.

Elsewhere, Blackstone Group and Carlyle Group could enter as a rival bidding group for TXU (TXU Quote), the utility that is already set to go private in the biggest LBO ever. Currently, Kohlberg Kravis Roberts and Texas Pacific are planning to buy TXU. The stock finished higher by $1.81, or 2.9%, at $64.56.