US close: Stocks rise on M&A news, strong manufacturing PMI

US stocks finished higher on Monday, bolstered by merger and acquisition deals and better-than-expected manufacturing data.

The Dow Jones Industrial Average rose 0.43% to 18,223.03 points, the S&P 500 gained 0.47% to 2,151.33 points and the Nasdaq grew 1.0% to 5,309.83 points.

Oil prices, however, fell as Iraqi oil minister Ali al-Luaibi said the nation wanted to be exempt from an OPEC deal to cut production.

West Texas Intermediate crude dropped 0.83% to $50.43 per barrel and Brent declined 0.73% to $51.40 per barrel at 2140 BST.

Elsewhere, positive sentiment surrounding merger and acquisition news gave the market a lift.

Shares in B/E Aerospace Inc. rallied after Rockwell Collins Inc. on Sunday announced a $6.4bn deal to merge the two aerospace suppliers.

Genworth Financial Inc. reversed earlier gains after agreeing to be bought by Chinese investment firm, China Oceanwide Holdings Group for $2.7bn.

AT&T shares were under pressure as its proposed $85bn takeover of Time Warner generated scepticism from Democrats and Republicans on Sunday. Time Warner shares were also lower.

In corporate earnings, Kimberly-Clark Corp. shares slid after the maker of Huggies nappies reported quarterly profit that fell short of forecasts.

VF Corp. slumped after the apparel group, which owns the Wrangler brand, cut its full year guidance.

On the economic data front, Markit’s US purchasing managers’ index rose to 53.2 in October from a three-month low of 51.5 in September, surpassing estimates for an unchanged reading. A level above 50 signals an expansion.

The Chicago Fed National Activity Index - a measure of economic activity - rose to negative 0.14 in September from negative 0.72 in August, compared to forecasts of negative 0.13. The improvement reflected a pick up in production, employment, housing and consumer spending.

Meanwhile, James Bullard, President of the Federal Reserve Bank of St. Louis and voting member of the Federal Open Market Committee, said low interest rates will likely be the normal over the next two to three years.

Chicago Fed President Charles Evans said the central bank should tie the pace of interest rate hikes to inflation.

The remarks from the Fed officials come ahead of next Wednesday’s policy decision.

Dow Jones - Risers

Microsoft Corp. (MSFT) $61.00 2.25%
Boeing Co. (BA) $137.45 1.34%
Wal-Mart Stores Inc. (WMT) $69.21 1.24%
3M Co. (MMM) $171.21 1.04%
Cisco Systems Inc. (CSCO) $30.46 1.03%
Coca-Cola Co. (KO) $42.54 1.02%
Visa Inc. (V) $83.17 1.00%
Home Depot Inc. (HD) $127.78 0.93%
Apple Inc. (AAPL) $117.65 0.90%
United Technologies Corp. (UTX) $99.52 0.86%