US stocks gained on Monday as a string of take-over announcements and better-than-expected economic data bolstered investors' confidence.
Bon-Ton Stores Inc said on Monday it agreed to buy 142 stores from Saks Inc for $1.1 billion in cash. Bon-Ton shares soared 21.3 percent to $20.21 and ranked among the Nasdaq's top percentage gainers, while shares of Saks jumped 7.2 percent at $17.86 on the New York Stock Exchange.
"It's pretty clear that companies have made money and their cash positions are high and this should help the market stage an advance in November and December," said Hugh Johnson, chief investment officer of Johnson Illington Advisors.
The Dow Jones industrial average was up 46 points, or 0.45 percent, at 10,449.11. The Standard & Poor's 500 Index was up 7.76 points, or 0.65 percent, at 1,206.17. The technology-laced Nasdaq Composite Index was up 27.22 points, or 1.30 percent, at 2,117.10.
The Dow's biggest lift came from Wal-Mart Stores Inc, up 3.6 percent at $47.13 on the NYSE. On Saturday, Wal-Mart estimated that October sales rose 4.3 percent at its US stores open at least a year, beating its forecast.
Caterpillar Inc, the heavy equipment maker, also gave the Dow a hefty lift after telling analysts in New York that it sees compounded average earnings growth of 15 percent to 20 percent until 2010. Caterpillar jumped 3 percent to $52.56 on the NYSE.
Better-than-expected economic indicators gave stocks a further boost.
Falling crude oil prices also contributed to factors lifting the mood on Wall Street. US crude for December delivery fell $1.22 to $60 a barrel as milder weather in the US Northeast, the world's biggest heating-oil consumer, decreased demand.
US consumer spending rose moderately last month as Americans spent more to fill their gas tanks, while post-hurricane insurance payments led to the biggest jump in income in 10 months, the Commerce Department said. The gain in spending matched expectations on Wall Street.
Meanwhile, business activity in the US Midwest expanded faster than expected in October, with new orders surging and hiring picking up steam as well, another report said. The National Association of Purchasing Management-Chicago business barometer rose in October to 62.9, its highest since July, from 60.5 in September. Economists expected a drop to 58.0.
"We're now getting data that includes the months of hurricanes and the data's not bad," said Joseph Battipaglia, chief investment officer of Ryan, Beck & Co, a brokerage and research firm.
In other take-over news, Swiss drug maker Novartis said it had agreed to buy all the remaining public shares of US vaccine maker Chiron Corp it does not own, offering $45 per share in cash, or a total of $5.1 billion. Chiron shares gained 1.8 percent to $44.20 on Nasdaq.
The stock of Canada's No 2 gold producer Placer Dome Inc jumped 19.4 percent, to $19.71 and was the NYSE's top percentage gainer after Barrick Gold Corp said on Monday it would offer $9.2 billion in cash and stock to acquire the company.
But shares of Qualcomm Inc fell more than 4 percent to $39.38 and exerted the biggest drag on the Nasdaq 100 on Monday after a Merrill Lynch analyst cut his rating on the wireless technology company to "neutral" from "buy."