Corporate dealmaking sends stock market higher at beginning of holiday-shortened week
NEW YORK (AP) -- Another wave of corporate dealmaking sent stocks sharply higher in early trading Monday.
French drug maker Sanofi-Aventis SA is buying health care products company Chattem Inc. for $1.9 billion, and mining equipment maker Bucyrus International Inc. is buying Terex Corp.'s mining equipment division for $1.3 billion. Meanwhile, Dutch auto maker Spyker Cars submitted a new offer to buy Saab from General Motors Co.
Stocks added to modest gains from Friday that followed upbeat earnings reports from business software company Oracle Corp. and BlackBerry maker Research In Motion Ltd.
Trading is likely to be volatile this week as traders take vacation ahead of the Christmas holiday on Friday. Trading has been thinning out since November, as many investors step away from the market to lock in the big gains they've amassed during a nine-month rally in stocks. The Standard & Poor's 500 index is up 23.5 percent for the year.
The Dow Jones industrial average rose 116.54, or 1.1 percent, at 10,445.43. The Standard & Poor's 500 index rose 13.17, or 1.2 percent, at 1,115.64, while the Nasdaq composite index rose 24.67, or 1.1 percent, at 2,236.36.
A weak dollar was also helping to boost stocks. The ICE Futures U.S. dollar index, which tracks the dollar against other major currencies, fell 0.1 percent. A weaker dollar has been a big driver of the stock market's rally this year. Investors have taken advantage of record-low interest rates to borrow cheaply and invest in assets like stocks and commodities.
Oil rose 70 cents to $74.06 a barrel on the New York Mercantile Exchange. Gold fell.
Bond prices fell sharply Monday as stocks rose. The yield on the benchmark 10-year Treasury note, which moves opposite to price, rose to 3.63 percent from 3.54 percent late Friday.
More than three stocks rose for every one that fell on the New York Stock Exchange, where volume was low at 180.2 million shares compared with 681.1 million shares at the same time on Friday.
Volume was exceptionally high Friday as several types of options contracts expired and S&P made changes to the S&P 500. That index is the basis for many indexed mutual funds, so those funds were forced to alter their holdings to match the reconstituted index.
In other trading, the Russell 2000 index of smaller companies rose 6.58, or 1.1 percent, to 617.15.
Overseas, Japan's Nikkei stock average rose 0.4 percent. Britain's FTSE 100 rose 1.2 percent, Germany's DAX index gained 0.7 percent, and France's CAC-40 rose 1.1 percent.
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