Merger Monday Lifts Stocks - TheStreet

Merger Monday Lifts Stocks

Stocks rebound from Friday's selloff after a host of new deals and solid earnings.
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Updated from 4:16 p.m. EDT

Stocks in New York opened the week on a high note, as a string of buyouts and upbeat earnings reports had traders moving to scoop up equities Monday.

The

Dow Jones Industrial Average

closed with a gain of 92.34 points, or 0.67%, to 13,943.42. The

S&P 500

was up 7.47 points, or 0.49%, to 1541.57, and the

Nasdaq Composite

advanced 2.98 points, or 0.11%, to 2690.58.

Robert Pavlik, chief investment officer with Oaktree Asset Management, said the rebound from Friday's selloff should give investors confidence in the market.

"This earnings reporting season has been very decent, and traders are now hopeful that the negative reports we've had will be the exceptions rather than the norm," he said.

About 3.14 billion shares changed hands on the

New York Stock Exchange

, as decliners matched advancers. Volume on the Nasdaq reached 2.06 billion shares, with losers outpacing advancers 8 to 7.

Brightening the mood were several mergers, including a mammoth combination that will see oil drillers

Transocean

(RIG) - Get Report

and

GlobalSantaFe

(GSF)

join forces. The combined company will have an enterprise value of $53 billion, and shareholders will receive cash totaling $15 billion.

Transocean climbed 5.5% to $115.96, and GlobalSantaFe added 4.8% to $78.33.

Another deal had Cerberus, a

private-equity firm, setting plans to acquire

United Rentals

(URI) - Get Report

for $2.83 billion, and

Barclays

(BCS) - Get Report

has raised its bid for

ABN Amro

(ABN)

to more than $93 billion.

Barclays rose 2.9% to $60.35, and United Rentals added 1.9% to $32.98. ABN Amro dipped 0.1% to $50.78.

Elsewhere,

Arrow International

(ARRO)

agreed to be bought by

Teleflex

(TFX) - Get Report

for $2 billion, and

ev3

(EVVV)

and

FoxHollow

(FOXH)

will merge in a $780 million transaction.

The profit reports were also solid for the most part.

Merck

(MRK) - Get Report

easily beat analysts' estimates and raised its guidance, while

Schering-Plough

(SGP)

and

Halliburton

(HAL) - Get Report

also topped expectations.

Merck gained 6.8% to $52.33, and Halliburton was higher by 3.2% to $37.74. Schering ended the day lower by 0.6% to $31.30.

Additionally,

Hasbro

(HAS) - Get Report

and

Taser

(TASR)

exceeded Wall Street's targets. Still, Hasbro sank 5.4% to $30.80, and Taser lost 3.4% to finish at $16.56.

"It's going to be all about earnings this week," said Peter Cardillo, chief market economist with Avalon Partners. "With one-third of the S&P reporting this week, it's going to be the main driving force. Now that options expiration is behind us, we can catch our breath."

The market's rebound came after a drubbing in the previous session. Weak numbers from

Google

(GOOG) - Get Report

and

Caterpillar

(CAT) - Get Report

slammed the market last time out, and the Dow fell 149.33 points, or 1.07%, to 13,851.08. The S&P 500 declined 18.98 points, or 1.22%, at 1534.10.

At the same time, the Nasdaq dropped 32.44 points, or 1.19%, at 2687.60. All three major averages were lower for the week.

In the absence of any economic data, Treasury prices were little changed. The 10-year note was down 3/32 in price, yielding 4.97%, and the 30-year bond was off 5/32, yielding 5.07%.

Meanwhile, the September crude contract traded as the front-month benchmark for the first time. Oil dropped 90 cents to close at $74.89 a barrel, and gasoline prices were lower by 6 cents at $2.10 a gallon.

On the research front, Citigroup upgraded both

Amgen

(AMGN) - Get Report

and

Anheuser-Busch

(BUD) - Get Report

to hold from sell. Amgen gained 62 cents, or 1.1%, to $56.80. Anheuser-Busch added 59 cents, or 1.2%, to $50.22.

Among downgrades, Banc of America Securities cut

ConocoPhillips

(COP) - Get Report

to neutral from buy, and Matrix Research reduced its rating for

Freeport-McMoRan

(FCX) - Get Report

to buy from strong buy. ConocoPhillips was lower by 67 cents, or 0.8%, to $85.63. Freeport-McMoRan was off by 4 cents at $98.99.

Overseas, markets were mostly higher. London's FTSE added 0.6%, while Frankfurt's DAX was up 0.9%. In Asia, Tokyo's Nikkei slid 1.1%, but Hong Kong's Hang Seng was better by 0.3%.

Following the close,

Texas Instruments

(TXN) - Get Report

and fellow chipmaker

Altera

(ALTR) - Get Report

were reporting second-quarter results.

The earnings barrage will continue before Tuesday's open, when such names as

AT&T

(T) - Get Report

,

McDonald's

(MCD) - Get Report

,

UPS

(UPS) - Get Report

and

DuPont

(DD) - Get Report

are due to report.

Amazon.com

(AMZN) - Get Report

and homebuilder

Centex

(CTX)

will post quarterly results later in the day.