Stocks Up on Merger Monday

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 and GlobalSantaFe 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 for $2.83 billion, and Barclays has raised its bid for ABN Amro to more than $93 billion.

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.

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%.