DEAL ACTIVITY in healthcare and a bounce in energy shares yesterday helped to push US stocks up by more than one per cent, rebounding from a sharp decline last week.
The Dow Jones industrial average rose 263.65 points, or 1.49 per cent, to 17,976.31, the S&P 500 gained 25.22 points, or 1.22 per cent, to 2,086.24 and the Nasdaq Composite added 56.22 points, or 1.15 per cent, to 4,947.44.
Major indexes each lost more than two per cent last week.
“[The rally] sort of seems to be global growth-based right now: the Chinese economy is falling but they’re going to stimulate,” said Uri Landesman, president of Platinum Partners in New York. M&A activity has helped to boost equities, especially shares of smaller companies, Landesman added. “That’s been a theme of this market on and off for a very long time.”
On the deal front, OptumRx, a unit of UnitedHealth Group, agreed to buy pharmacy benefit manager Catamaran in a deal worth $12.78bn. Shares of UnitedHealth, a Dow component, rose 2.5 per cent to $121 while US shares of Catamaran added 23.8 per cent to $59.83.
The Nasdaq Biotech index rose 1.1 per cent, but remains roughly five per cent below a record high from earlier this month. The group has recently been under pressure, with the index down 5.2 per cent last week in its biggest weekly decline in a year. Teva Pharmaceutical said it would buy Auspex for $3.5bn and saw its shares rise 0.9 per cent to $62.52, while Auspex added 41.5 per cent to $100.36.