Several big acquisitions and a strong earnings report from Loews Corp pushed US stocks higher on Monday.
Pride International jumped 16% after Ensco, a London-based oil rig operator, said it would buy the offshore driller for $7.3 billion (£4.5 billion).
Beckman Coulter gained 10% after Danaher Corp said it plans to buy the manufacturer of medical diagnostic tests for $5.8 billion (£3.6 billion).
Loews Corp, which owns Loews hotels and the property insurer CNA Financial Corp, saw shares rise 4% after falling costs helped earnings rise 16% even as revenue slipped slightly. The results were higher than analysts were expecting and helped push financial companies higher.
Joseph Saluzzi, co-head of equity trading at Themis Trading, said that with no major economic reports due out this week, mergers and earnings reports will continue to drive stocks higher. Anything that can be construed as good news is likely to give investors a reason to buy stocks, he said.
“The path of least resistance right now is up,” Saluzzi said. “People are beginning to assume the market is going higher. It’s momentum.”
The Dow Jones industrial average rose 69.48 points, or 0.6%, to 12,161.63. The Standard&Poor’s 500 index rose 8.18, or 0.6%, to 1,319.05. The Nasdaq composite gained 14.69, or 0.5%, to 2,783.99.
Financial companies rose 1.5%, the largest gain of any of the 10 company groups that make up the S&P index.
Lorillard rose 2% after the company, which makes Newport and Maverick cigarettes, said it increased both sales and prices of its products.
AOL dropped 3.4% after saying it would buy the Huffington Post, a news and opinion website, for $315 million (£195 million). Arianna Huffington, the site’s co-founder and political pundit, will join AOL’s management team.