Global Rally Shines on Wall Street

The stock market rallied Monday, working off some of last week's pressures on the coattails of strong overnight trading sessions in Asia and Europe and of approximately $20 billion of merger and acquisition announcements.

U.S. M&A activity is running at the second-fastest-ever pace year-to-date, up 15% from 2006 levels, says Richard Peterson, analyst at Thomson Financial. "It looks like this quarter is headed for a $400 billion-plus quarter ... better than $4.4 billion a day in deals, or an average of $185 million every hour 24-seven," he adds.

Europe's enthusiasm for a merger between banks Barclays(BCS Quote) and ABN Amro(ABN Quote) spilled over to U.S. shores. ABN jumped 14% while Barclays slipped 0.28% on the news.

Investors also cheered the potential for a competing bid for Texas utility TXU(TXU Quote) by Blackstone Group and Carlyle Group. TXU jumped 2.9% on the news, while lawn care and pest control company ServiceMaster (SVM Quote) added 12.5% on news of its private equity buyout.

Also, Community Health Systems(CYH Quote) is planning to acquire Triad Hospitals(TRI Quote) in a $6.8 billion deal. Triad rose 5.3%, and Community Health shed 5.5%.

In reaction to those and other deals, the Dow Jones Industrial Average added 1%, or 116 points, Monday to close at 12,226.17, while the S&P 500 finished 1.1% higher to close at 1402.06. The Nasdaq Composite closed up 0.9% Monday to close at 2394.41.