New York - US stocks rose on Monday, rebounding from the previous session's decline, amid a flurry of merger and acquisition activity in the pharmaceutical sector.
Pharmaceuticals outperformed other sectors after US drugmaker Pfizer Inc was said to be working on its next move in a potential $100 billion bid to take over Britain's AstraZeneca Plc, after two earlier bids were rejected.
Pfizer was the biggest gainer on the Dow Jones industrial average, up 3.9 percent at $31.94.
Separately, Forest Laboratories Inc said it would buy Furiex Pharmaceuticals Inc for up to $1.46 billion, including milestone payments to access Furiex's promising treatment for irritable bowel syndrome.
Furiex Pharmaceuticals shares jumped 30 percent to $104.12 while Forest Laboratories shares were up 0.4 percent at $90.27.
Adding optimism about the economy, data showed contracts to buy previously owned US homes rose in March for the first time in nine months, in the latest sign that the housing market was stabilising after a recent wobble.
“Clearly investors are shifting focus to the rich economic calendar we have this week and other events like the FOMC meeting and away from geopolitical concerns,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
US President Barack Obama on Monday announced new sanctions against some Russians to stop President Vladimir Putin from fomenting a rebellion in eastern Ukraine, but said he was holding broader measures against Russia's economy “in reserve.”
The Dow Jones industrial average rose 110.08 points, or 0.67 percent, to 16,471.54, the S&P 500 gained 8.48 points, or 0.46 percent, to 1,871.88 and the Nasdaq Composite added 12.654 points, or 0.31 percent, to 4,088.215.
On the benchmark S&P index, financial stocks were among the worst performers, with the sector down 0.2 percent. Bank of America shares were down 4.6 percent at $15.22 while Goldman Sachs fell 0.9 percent to $156.81.
Bank of America Corp said it would suspend a $4 billion stock buyback program and a planned increase in its quarterly dividend after it miscalculated the treatment of certain structured notes related to its acquisition of Merrill Lynch in 2009.
The company also said it would resubmit its 2014 capital plan to the Federal Reserve.
On the Nasdaq, Amazon.com Inc was one of the biggest losers, extending Friday's sharp decline following its earnings statement.
The stock was off 2.2 percent at $296.90.
Netflix Inc was down 2.5 percent at $313.98.
Comcast Corp offered to sell 1.4 million pay TV subscribers to Charter Communications Inc for $7.3 billion as part of a transaction aimed at winning regulatory approval for its proposed $45 billion takeover of Time Warner Cable.
Charter Communications shares rose 7.3 percent to $139.56 after the company also reported a 15 percent jump in first-quarter revenue. - Reuters