By Caroline Valetkevitch
(Reuters) – U.S. stocks were up more than 1% on Monday afternoon as signs of progress in developing a COVID-19 vaccine and a spurt of multibillion-dollar deals lifted investor optimism.
Nvidia Corp jumped 5.0% on plans to buy UK-based chip designer Arm from Japan’s SoftBank Group Corp for as much as $40 billion, in a deal set to reshape the global semiconductor landscape.
The Philadelphia SE chip index rose 1.9.
Oracle surged 5.0% as the cloud services company said it would team up with China’s ByteDance to keep TikTok operating in the United States, beating Microsoft Corp in a deal structured as a partnership rather than an outright sale.
Merger and vaccine-related news has “really lifted the market,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.
He said value-related areas of the market were holding up well, continuing a recent trend. “It leads us to believe the rotation we’ve been seeing out of tech to other parts of the market is likely to continue.”
U.S. stocks are coming off of two straight weeks of losses as investors sold heavyweight technology shares that had powered the benchmark index to record highs in a dramatic recovery from its March lows.
The Dow Jones Industrial Average rose 364.6 points, or 1.32%, to 28,030.24, the S&P 500 gained 46.15 points, or 1.38%, to 3,387.12 and the Nasdaq Composite added 182.54 points, or 1.68%, to 11,036.08.
All of the S&P 500 sectors were higher, and tech-related heavyweights Apple Inc, Facebook.com and Google-parent Alphabet Inc were higher.
Tesla Inc’s shares rebounded nearly 10%, recovering after losses last week.
Sentiment also got a lift on Monday after drugmaker AstraZeneca resumed its British clinical trials of its COVID-19 vaccine, one of the most advanced in development. [MKTS/GLOB]
Pfizer Inc gained 3.4% after the drugmaker and German biotech firm BioNTech SE proposed to expand their Phase 3 pivotal COVID-19 vaccine trial to about 44,000 participants.
Later this week, investors will focus on the Federal Reserve’s last policy meeting before the Nov. 3 U.S. presidential elections.
Immunomedics Inc’s shares jumped after Gilead Sciences Inc’s $21 billion buyout deal, which is a steep premium to the biotech company’s closing price on Friday. Gilead gained 3.1%.
Seattle Genetics gained 13% after Merck & Co Inc said it would buy $1 billion worth of equity stake in to co-develop and sell the smaller drugmaker’s cancer therapy.
Advancing issues outnumbered declining ones on the NYSE by a 4.52-to-1 ratio
The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 49 new highs and 18 new lows.
(Additional reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Saumyadeb Chakrabarty, Maju Samuel and Tom Brown)
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