US open: Stocks in the black as M&A activity provides a boost

US stocks were firmer in early trade following heavy losses in the previous session as M&A activity provided a boost.

At 1515 BST, the Dow Jones Industrial Average was up 0.3%, the S&P 500 was 0.4% higher and the Nasdaq was up 0.6%.

Meanwhile, oil prices moved back into the red, having been higher earlier as they rebounded from weakness on Tuesday. West Texas Intermediate was down 1.3% to $44.32 a barrel while Brent crude was off 1.4% at $46.42.

Prices had fallen sharply in the previous session after the International Energy Agency downgraded its forecast for global oil demand for this year and the next and rebalancing the oil market would take longer than previously thought.

CMC Markets’ Michael Hewson said: “With the US central bank now in blackout period ahead of the decision next Wednesday there is little in the way of positive drivers helping underpin the market at this time, despite some better than expected Chinese economic data earlier this week.

“On the plus side we won’t have to listen to the arguments over whether Fed policymakers think they should or shouldn’t raise rates when they convene to meet next week, though it is clear that despite the rebound in the US dollar over the past few days it would be a major surprise if the Fed did anything at all next week.”

On the corporate front, deal news helped to underpin the mood somewhat. Shares in US seeds giant Monsanto rallied after it agreed to be bought by German chemicals and drugs firm Bayer for $128 per share in an all-cash transaction that will create a company worth $66bn.

Clinical-stage biotechnology company Vitae Pharmaceuticals rocketed 158% after it agreed to be bought by Allergan for $21 per share in cash, for a total transaction value of about $639m.

Herbalife racked up healthy gains after activist investor Carl Icahn suggested the company would be better off going private.

Elsewhere, Macy’s pushed up after Citigroup upgraded the stock to ‘buy’ from ‘neutral’.