By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Catamaran surges after UnitedHealth Groups buys the company
NEW YORK (MarketWatch) -- U.S. stocks advanced on Monday, with
the main indexes booking solid gains for the second straight
session, driven by dovish comments from China's central-bank chief
as well as a continued flurry of deal announcements.
The S&P 500 (SPX) closed 25.22 points, or 1.2%, to 2,086.24,
with gains across the board. Energy stocks were the biggest winner,
with the sector rising 2.1%. The Dow Jones Industrial Average (DJI)
finished up 263 points, or 1.5%, to 17,947.44. Among the
blue-chips, 28 of the 30 components ended with gains.
The Nasdaq Composite (RIXF) gained 56.22 points, or 1.2%, to
4,947.44
"Today's rally suggests investors still prefer aid from central
banks to actual growth in the economy and are willing to bear
above-average risks for below-average returns," said Channing
Smith, managing director at Capital Advisors.
On Sunday, the PBOC governor said
(http://www.marketwatch.com/story/china-central-bank-chief-warns-of-us-dollar-strength-2015-03-29)
he saw "more room" for China to ease policy if the economy stays
soft and inflation continues to weaken. On Monday, Chinese stocks
closed at a seven-year high
(http://www.marketwatch.com/story/chinese-stocks-rally-on-silk-road-details-2015-03-30).
"Investors had been worried about China's slowing growth, so
encouraging comments from their central bank lifted markets. And
merger news also contributed to the sudden rush into stocks," said
Kate Warne, investment strategist at Edward Jones.
"Stock markets tend to over-react to good and bad news. While it
is positive that markets have once again showed resiliency and
bounced back, I am not sure a 200+ gain on the Dow is warranted,"
Warne said.
Smith said that he's taking a cautious approach to Monday's
run-up. "Our approach is to raise cash at this point. The higher
stock market rises, the more conservative we get, given stocks are
very expensive," Smith added.
Read: If the Fed doesn't hike rates, it will be due to one of
these charts () ()
Big week for data: The shortened week for investors will still
see nonfarm-payrolls data arrive on Friday, when markets are closed
(http://www.marketwatch.com/story/when-do-markets-close-for-good-friday-2015-03-27).
Read: When do markets close for Good Friday?
(http://www.marketwatch.com/story/when-do-markets-close-for-good-friday-2015-03-27)
Investors assessed data on consumer spending and personal
income. Continued softness in economic data has put the Federal
Reserve into patient mode. On Friday, Federal Reserve Chairwoman
Janet Yellen said gradual hikes are likely this year, but that the
central bank will move cautiously, speaking at a conference
sponsored by the San Francisco Fed.
U.S. consumers barely increased spending in February in another
signal that the economy slowed in the first quarter. Personal
incomes, meanwhile, rose for the fourth time in a five months and
the saving rate climbed for the third straight month.
Separately, pending home sales in February reached their highest
level since June 2013, a trade group said Monday.
Stocks to Watch: Shares of Catamaran Corp.(SXCI) surged 24%
after UnitedHealth Group Inc.(UNH) said it would buy the
pharmacy-benefit manager for around $12.8 billion in cash.
UnitedHealth rose 3.4%.
Teva Pharmaceutical Industries Ltd.(TEVA) on Monday announced an
agreement to buy Auspex Pharmaceuticals Inc.(ASPX) in a deal valued
at $3.2 billion. Auspex jumped 42%% to $100.36.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/aar-cal-maine-american-realty-capital-earnings-in-focus-2015-03-29).
Other markets: In Europe, the Stoxx Europe 600 index rallied
Monday, with the benchmark rising 1%.
U.S. crude-oil prices
(http://www.marketwatch.com/story/iran-talks-keep-crude-oil-futures-under-pressure-in-asia-2015-03-30-31032459)
settled lower, falling 19 cents, or 0.4%, to close at $48.68 a
barrel (CLK5), while gold
(http://www.marketwatch.com/story/gold-loses-ground-again-as-data-anticipation-builds-2015-03-30)
prices (GCK5) closed lower for the second session, falling $15, or
1.3%, to settle at $1,184.80 an ounce. The dollar
(http://www.marketwatch.com/story/dollar-inches-up-against-euro-yen-as-big-data-week-kicks-off-2015-03-30)(DXY)
rose against major currencies.
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