NEW YORK – U.S. stocks rallied Monday, with the Dow and the S&P 500 making their biggest one-day gains in a month, as investors welcomed a flurry of corporate takeovers a day before U.S. congressional elections.
The Dow Jones industrial average climbed 119.51 points, or 1.00 percent, to end at 12,105.55. The Standard & Poor's 500 Index gained 15.48 points, or 1.13 percent, to finish at 1,379.78. The Nasdaq Composite Index rose35.16 points, or 1.51 percent, to close at 2,365.95.
The Dow snapped a six-session string of losses, rising more than 100 points, while the Nasdaq had its best one-day jump since Oct. 12.
The deals included Abbott Laboratories Inc.'s (ABT) $3.7 billion takeover bid for Kos Pharmaceuticals Inc. (KOSP), an all-cash offer for Swift Transportation Co. Inc. (SWFT) and a $3.2 billion buyout offer for OSI Restaurant Partners (OSI) Inc.
Canada-based Four Seasons Hotels Inc. (FS) said it had received a buyout offer from Saudi Prince Alwaleed bin Talal and an investment firm owned by Microsoft Corp. (MSFT) Chairman Bill Gates for $82 a share, valuing the luxury hotel chain at $3.7 billion.
"It's merger Monday, with three or four deals. There's a fair amount of news out there to remind people that Corporate America has plenty of cash to invest," said John Forelli, senior vice president and portfolio manager at Independence Investment LLC, in Boston.
Takeovers also suggest industry experts consider stock prices attractive and reflect confidence in the economic outlook.
Traders said volume was modest ahead of Tuesday's elections. Opinion polls show Republicans gaining ground in some key Senate races, but Democrats were still positioned to make gains in the Senate and recapture control of the U.S. House of Representatives for the first time since 1994.
If the election results in political gridlock, as polls indicate, analysts said that could be a positive for the markets.
Abbott said it would acquire Kos Pharmaceuticals in a $3.7 billion deal, and restaurant operator OSI said it agreed to be acquired by an investor group in a transaction worth about $3.2 billion.
Drug wholesaler McKesson Corp. said it agreed to buy health administration company Per-Se Technologies for $1.23 billion, broadening its portfolio of health-care software.
Per-Se shares jumped 12.7 percent, or $3.10, to $27.55, while Kos Pharmaceuticals shares surged 53.8 percent, or $26.97, to $77.06, both in Nasdaq trading.
On the New York Stock Exchange, OSI shares jumped nearly 23 percent, or $7.32, to $39.75 and McKesson shares climbed 2.4 percent to $49.69.
But Abbott shares dipped 0.4 percent, or 17 cents, to $47.47 in NYSE trading.
Swift shares surged 24.1 percent, or $5.79, to $29.84 on Nasdaq after the trucking company said it had received an offer from Jerry Moyes, its largest shareholder and former chief executive.
U.S.-listed shares of Four Seasons soared 29.2 percent, or $18.63, to $82.50, making them the biggest percentage gainer on the NYSE.
Meanwhile, shares of network equipment maker Cisco Systems Inc. rose 3.8 percent, or 91 cents, to $24.68 on Nasdaq after JP Morgan reiterated its "overweight" rating and forecast strong growth in the company's results, which will be released after the market closes Wednesday. Analysts expect to see firm earnings growth as businesses upgrade their networks to handle increased Internet traffic.
Trading was moderate on the NYSE, with about 1.53 billion shares changing hands, below last year's daily average of 1.61 billion, while on Nasdaq, about 1.94 billion shares traded, above last year's daily average of 1.80 billion.
Advancing stocks outnumbered declining ones by a ratio of 3 to 1 on the NYSE and on Nasdaq, by about 7 to 3.