Wall Street jumps on robust deal activity

Wall Street shares roared back Monday to snap a three-day losing streak, boosted by a pick-up in merger and acquisition activity.

The Dow Jones Industrial Average climbed 124.17 points (1.28 percent) to end at 9,789.36.

The technology-heavy Nasdaq composite added 39.82 points (1.90 percent) to 2,130.74 and the Standard & Poor's 500 index rose 18.60 points (1.78 percent) to 1,062.98.

Traders returned Monday to witness an early stock rebound after the market fell for the third consecutive day Friday as disappointing economic data prompted investors to retrench ahead of the weekend.

Stocks overcame broad-based losses in Asia and gained ground amid large merger and acquisition announcements by companies such as Xerox, Johnson & Johnson and Abbott Laboratories, suggesting growing confidence in the corporate sector, analysts at Charles Schwab & Co said in a note to clients.

"The return of 'Merger Monday' has sparked a triple digit rally on the Dow," they said.

Xerox will acquire Affiliated Computer Services for about US$6.4 billion, while Abbott Laboratories reported that it will purchase the pharmaceutical unit of Belgium-based Solvay for about US$6.6 billion in cash.

"Acquisition premiums have been inconsistent the last several weeks, yet recently they have been quite robust, which is a point that hasn't gotten lost on the speculative crowd," said Patrick O'Hare of Briefing.com.

With just a couple of trading days left in the month, "September seems poised to defy its reputation as a bad-luck charm for stocks," said Elizabeth Harrow of Schaeffer's Investment Research.

However, she cautioned that Monday's breakout rally occurred amid notably low volume.

Last week, the S&P 500 experienced its worst weekly decline in nearly two months.

The 2.2 percent drop came in the midst of some weaker-than-expected economic data and a not-so-surprising Federal Reserve decision to maintain interest rates.

Following its acquisition move Monday, Xerox declined 14.38 percent to US$7.68 but Affiliated Computer Services climbed 13.99 percent to US$53.86.

Abbott Labs was up 2.64 percent to US$48.58.

Health care giant Johnson & Johnson rose 1.07 percent to US$61.27 after it bought an 18 percent stake in biotech firm Crucell for 302 million euros (US$444 million) as part of a flu vaccine development deal.

Acting as a bullish bellwether for the technology sector, computer networking giant Cisco Systems jumped 4.38 percent to US$23.61 as Barclays Capital upgraded the networking giant to overweight.

Computer giant Apple gained 2.07 percent to US$186.15 after it was announced that China Unicom will begin offering Apple's iPhone in China next month.

The bond market also rose. The yield on the 10-year Treasury bond retreated to 3.302 percent from 3.329 percent Friday and that on the 30-year bond fell to 4.045 percent from 4.093 percent. Bond yield and prices move in opposite directions.