US stocks rose on Monday, sending the S&P 500 index up 1 percent to a six-year high and the Nasdaq up more than 1 percent as lower oil prices and a barrage of corporate deals boosted optimism about the economic outlook.
In addition, a report suggesting the housing market was stabilising underpinned gains, overshadowing a sell-off in the shares of Pfizer Inc after the drugmaker abandoned a key experimental drug.
Traders also said a respite in the dollar's decline underpinned gains. "Oil is down a dollar, which is a little bit of an impetus," said Todd Leone, head of listed trading with Cowen & Co in New York. "M&A activity also clearly helps, but I think if the dollar were to continue to drop, that would put a stop to the gains," Stephen Massocca, co-chief executive at San Francisco-based investment bank Pacific Growth Equities.
The Dow Jones industrial average was up 110.55 points, or 0.91 percent, at 12,304.68. The Standard & Poor's 500 Index was up 13.99 points, or 1.00 percent, at 1,410.70. The Nasdaq Composite Index was up 41.59 points, or 1.72 percent, at 2,454.80.
Monday's deal news included Bank of New York Co Inc, which said it plans to buy Mellon Financial Corp for about $16.5 billion to create the world's largest securities servicing and asset management firm. Bank of New York shares jumped 12 percent to $39.75 on the New York Stock Exchange.
Cisco shares rose 3 percent to $27.49. But shares of Pfizer dropped more than 11 percent. Pfizer, the most heavily traded stock on the New York Stock Exchange, fell to $24.60, down $3.26.
The decline in oil prices spurred demand for industrial stocks such as diversified manufacturers United Technologies Corp, up 2.4 percent at $65.38, and Honeywell International Inc, up 2 percent at $43.65. Shares of 3M Co, another industrial conglomerate, rose 1.5 percent to $81.19.