US stock indexes gained on Monday as deal news and pharmaceutical sector profits renewed optimism about the equities market after Friday's sell-off. Merck & Co, a Dow component, reported quarterly results above analysts' expectations.
Also on Monday Transocean Inc, the world's largest offshore driller, said it had agreed to buy drilling rig operator GlobalSantaFe Corp. Also boosting stocks was news of nearly $1 drop in crude oil futures, pushing New York oil prices back below $75 a barrel. The decline in oil underpinned gains by big manufacturers such as 3M Co, whose stock rose 1.1 percent to $91.23.
Merck shares jumped 8.4 percent to $53.13, their biggest gain in more than 3 months. The index of pharmaceutical stocks rose 1.3 percent. Halliburton Co, the world's second-largest oil services company, also beat profit expectations, sending its shares up 3.9 percent at $37.99.
Shares of Transocean rose 6.9 percent to $117.59 on the New York Stock Exchange. GlobalSantaFe's shares advanced by 5.3 percent to $78.70. The S&P oil and gas index was up 4.7 percent.
In other deal news, United Rentals Inc, the world's largest equipment rental company, said it had agreed to be bought by private equity firm Cerberus Capital Management for $4 billion. Shares of United Rentals rose 2 percent to $33.03.