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NEW YORK (AP) - Corporate dealmaking is boosting investors' hopes for a recovery in the economy.
Stocks jumped Monday after Abbott Laboratories said it would buy the pharmaceutical business of Belgian chemicals maker Solvay for $6.6 billion and Xerox Corp. agreed to acquire Affiliated Computer Services for about $6.4 billion.
A weaker dollar is boosting commodity prices, which in turn helped send materials and energy stocks higher.
All major indexes rose more than 1 percent, including the Dow Jones industrial average, which added 135 points.
The takeover moves are a welcome sign that businesses have enough faith in a recovery in the economy to pursue acquisitions. In the past year, companies grew so worried about the economy that they were hesitant to part with cash and often had trouble lining up financing.
"It's encouraging to all investors when you see companies buy because basically what that says is they're in a more aggressive mode as opposed to being in the fetal position," said Mark Coffelt, portfolio manager at Empiric Funds in Austin, Texas.
In early afternoon trading, the Dow rose 135.43, or 1.4 percent, to 9,800.62.
The broader Standard&Poor's 500 index rose 17.63, or 1.7 percent, to 1,062.01, and the Nasdaq composite index rose 44.44, or 2.1 percent, to 2,135.36.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.33 percent from 3.32 percent late Friday.
The dollar mostly fell against other currencies, while gold prices rose.
The stock market's rise breaks a three-day slide that gave the market its worst week since early July. The losses were modest given how far stocks have climbed since major indexes slid to 12-year lows on March 9. The S&P 500 index is up 54.4 percent since then.
Abbott Labs rose $1.47, or 3.1 percent, to $48.80.
Johnson&Johnson Inc. rose 76 cents, or 1.3 percent, to $61.38, after it bought an 18 percent stake in Dutch biotechnology company Crucell NV for $440 million in hopes of developing a universal flu vaccine.
Among information-technology companies, Affiliated Computer jumped $5.94, or 12.6 percent, to $53.19, while Xerox fell $1.58, or 17.6 percent, to $7.39.
Investors pumped money into other IT services companies following the move by Xerox. Accenture PLC rose $1.71, or 4.7 percent, to $37.83, while Unisys Corp. rose 28 cents, or 11.7 percent, to $2.68.
Crude rose 74 cents to $66.76 a barrel on the New York Mercantile Exchange as the dollar slid. Commodities are priced in dollars so a weak greenback makes them more appealing to foreign buyers.
More than four stocks rose for every one that fell on the New York Stock Exchange, where volume came to 424.4 million shares compared with 539.2 million shares traded at the same point Friday. Trading was light as some market participants were out for Yom Kippur, the holiest day of the Jewish calendar.
The Russell 2000 index of smaller companies rose 14.71, or 2.5 percent, to 613.65.
Overseas, Britain's FTSE 100 rose 1.6 percent, Germany's DAX index rose 2.8 percent, and France's CAC-40 advanced 2.3 percent. Japan's Nikkei stock average fell 2.5 percent.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
