Dow surges 300 points | Dealmaking sparks rally | Tesla jumps 12%
EDITOR'S NOTE
What's the best medicine for a market coming off a weak performance the prior week? A flurry of corporate deals and renewed coronavirus vaccine hope, apparently.
The major averages posted sharp gains on Monday after several deals were announced on the tech and pharma fronts.
Nvidia said it was buying fellow chipmaker Arm Holdings from SoftBank for $40 billion. The transaction, which is expected to close next year, will be financed through a combination of common stock and cash. Meanwhile, TikTok-parent ByteDance chose Oracle as its U.S. technology partner and rejected Microsoft's bid to purchase the popular social video app. Both Nvidia and Oracle shares surged on the news. Shares of Immunomedics doubled after it was announced that Gilead Sciences would buy the cancer drugmaker for $21 billion. Market sentiment also got a boost after Pfizer CEO Albert Bourla said the company could deliver its coronavirus vaccine by year-end. AstraZeneca also resumed phase three trials for its vaccine in the U.K. following a halt for safety concerns. (However, it is reportedly still halted in the U.S.)
This deluge of positive news helped the market claw back some of its steep losses this month. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all rose more than 1%. Some strategists also think the worst may be over for equities after last week's sell-off, which was sparked by sharp declines in tech.
"September has thus far lived up to its reputation, but I think that's reversing again," said Peter Cardillo, chief market economist at Spartan Capital Securities.
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