Overnight Markets: Wall Street surges on deal activity

Wall Street surged on Monday, sending the Standard & Poor’s 500 Index to a four-month high, as more deal activity and speculation that the Federal Reserve could introduce further quantitative easing boosted investor confidence.

The Dow Jones industrial average gained 146 points, or 1.37%, at 10,754. The Standard & Poor's 500 Index rose 1.5%, at 1,143. The Nasdaq Composite Index was up 40 points, or 1.74%, at 2,355.83.

IBM was among leading gainers on the Dow after it agreed to acquire Netezza Corp for $1.7 billion in the latest in a string of large tech deals. Shares of IBM rose 1.2%, while Netezza advanced 7.5%.

L-1 Identity Solutions surged 20% after French defence contractor Safran said it will purchase the core biometric identity business for $1.1bn. Safran’s US-listed shares rose 7.9%. In a separate deal, L-1 will offload its government consulting unit to BAE Systems for almost $300m. BAE’s US-listed shares added 1.4%.

Internet Brands, the website operator, climbed 44.5% after it agreed to be acquired by an affiliate of Hellman & Friedman Capital Partners for nearly $640m.

In other company news, Lennar gained 8.2% after the homebuilder topped projections as margins widened. In financials, JP Morgan Chase gained 2.8% and Bank of America advanced 2.5%.

Equities gained even after the National Association of Home Builders/Wells Fargo confidence index remained unchanged at 13, the lowest level in 18 months.

There was speculation that the Fed Open Market Committee could take action to boost the economic recovery at its meeting on Tuesday.

In Europe, shares gained on Monday amid optimism that the economy will not deteriorate further. The FTSEurofirst 300 index rose 1.4%. Britain's FTSE 100, Germany's DAX and France's CAC40 rose between 1.4% and 1.8%.

In current trading, Asian stocks gained on Tuesday after Lennar reported better-than-estimated profit, boosting optimism in the economic recovery worldwide.

The MSCI Asia Pacific Index gained 0.3% to 125 as of 10.48 a.m. in Tokyo. The Nikkei 225 Stock Average rose 0.4% in Japan to 9,664. Australia’s S&P/ASX 200 Index gained 0.6%. Hong Kong’s Hang Seng was treading 0.5% higher at 22,078, while Shanghai Composite Index in china was up 0.1% at 2,591.