NEW YORK – Wall Street rose modestly on Monday with investor appetite for stocks lifted by a flurry of merger deals and the expected congressional approval of a tax-cut extension.
General Electric Co (GE.N) said it will buy British oilfield services company Wellstream Holdings Plc (WSML.L) for about 800 million pounds ($1.3 billion) to expand its subsea equipment and services portfolio.
Dell Inc (DELL.O) agreed to buy data storage company Compellent Technologies Inc (CML.N) for about $960 million in cash to expand beyond PCs and catch up with rivals Hewlett-Packard Co (HPQ.N) and IBM (IBM.N) in technologies like cloud computing.
Dell shares fell 2.6 percent to $13.52 after it offered $27.75 a share for Compellent. Compellent shares slipped 3 percent to $27.87.
"Merger news indicates that stocks are well valued, especially for a bellwether like GE. If good things happen to GE, like buying other companies, that feeds more optimism about the U.S. market in general," said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
The Democratic-led U.S. Congress moved on Monday toward grudging approval of President Barack Obama's deal with Republicans to extend expiring tax cuts, even for the wealthiest Americans. Backers were expected to muster on Monday the needed 60 votes in the 100-member Senate to clear a procedural hurdle, before passage on Tuesday or Wednesday.
The Dow Jones industrial average (.DJI) was up 17.14 points, or 0.15 percent, at 11,427.46. The Standard & Poor's 500 Index (.SPX) was up 2.10 points, or 0.17 percent, at 1,242.50. The Nasdaq Composite Index (.IXIC) was up 0.32 points, or 0.01 percent, at 2,637.86.
On Friday the S&P 500 closed its highest level since Lehman Brothers collapsed in 2008, breaching technical levels that suggest the year-end rally will persist. The Dow posted two consecutive week of gains.
In China, the central bank raised lenders' requirements instead of benchmark interest rates over the weekend, easing concerns that tightening its monetary policy could lead to a slowdown in one of the major growth engines of the global economy.
Data over the weekend showed China's industrial output topped expectations and inflation rose to a 28-month high in November.