US stocks rose sharply on Monday, boosted by a big hospital take-over and other deals as well as stronger-than-expected earnings from major drug companies. The earnings news lifted the pharmaceutical sector, and all three major stock indexes were up more than 1 percent.
HCA Inc, the No 1 US hospital chain, agreed on Monday to be bought by an investor group for about $21 billion. In addition, Advanced Micro Devices Inc, the No 2 supplier of computer processors, said on Monday it would acquire graphics chip maker ATI Technologies Inc.
Drug makers Merck & Co and Schering-Plough Corp both reported earnings that beat analysts' estimates. The Dow Jones industrial average was up 134.56 points, or 1.24 percent, at 11,002.94. The Standard & Poor's 500 Index was up 15.55 points, or 1.25 percent, at 1,255.84. The Nasdaq Composite Index was up 26.06 points, or 1.29 percent, at 2,046.45. Advancers outpaced decliners on the New York Stock Exchange by more than 4 to 1.
"The bull is back, at least in the short term," said Tom Schrader, managing director of US equity trading at Stifel Nicolaus Capital Markets in Baltimore.
The HCA deal has helped fuel investor optimism, he said. "Whenever you've got private equity getting back involved in the stock market, that's always a major plus," he said.
HCA's stock was up 2.9 percent at $49.27 on the New York Stock Exchange. ATI shares shot up 18.1 percent to $19.55 on Nasdaq, while AMD's stock fell 4.3 percent to $17.46 on the NYSE. Shares of Merck were up 3.6 percent at $38.80 and ranked among the major gainers in both the Dow and the S&P 500, while Schering-Plough gained 6 percent to $20.59. An index of drug stocks rose 1.9 percent.
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