Stocks end up nearly 1% after a late-day charge returned the major averages to near session highs. Stocks also picked up the pace earlier in the day when two new economic reports added to the opening gains linked to mergers and acquisitions activity. Monday's performance snapped a four-day streak of declines seen on less-than- robust economic news.
The Institute for Supply Management reported that economic activity in the non-manufacturing services sector expanded in September. The index came in at 50.9% in September, 2.5 percentage points higher than the 48.4% in August, indicating growth in the non-manufacturing sector after 11 consecutive months of contraction. The index also topped analysts' call for 50%, the organization said.
The Conference Board also said this morning its Employment Trends Index edged up to 88.5 in September from an upwardly revised 88.2 in August, originally reported at 88.1, suggesting the job market grew stronger during the month for the first time since January.
Today's turnaround comes after stocks fell for the fourth straight day on Friday as weak jobs data gave more evidence the economic recovery would be less robust than expected. But investors shopping for bargains among beaten down stocks and corporate mergers and acquisitions activity are provided early lift.
Among potential deals, Prudential Financial Inc (
PRU) may sell its investment and fund management businesses in South Korea, a deal which could fetch about $850 million
A consortium is making a bid to buy Volvo (VOLVa.ST) from Ford Motor (F), the Financial Times reported. The group is challenging China's Geely Automotive, which confirmed its interest in the money-losing Swedish carmaker last month.
General Electric Co (
GE) and Comcast Corp (
CMCSA), working on a deal to spin off GE's NBC Universal, have valued it at $30 billion, including $9 billion of debt, according to several reports.
Brocade Communications Systems Inc (
BRCD) has put itself in play, the Wall Street Journal reported, citing people familiar with the matter. The paper said Oracle Corp (
ORCL) and Hewlett-Packard (
HPQ) were potential bidders, although the deal was not certain.
Financials were leading gainers.
