Stocks turned in a strong performance on Monday, continuing to recovery from the sell-off that was seen early last week. The markets benefited from news on the merger-and-acquisition front as well as easing concerns about the nuclear crisis in Japan.
After showing a notable move in early trading, the major averages moved roughly sideways for the remainder of the day. The Dow closed up 178.01 points or 1.5 percent at 12,036.53, the Nasdaq jumped 48.42 points or 1.8 percent to 2,692.09 and the S&P 500 rose 19.18 points or 1.5 percent to 1,1298.38.
The strength in the markets was partly due to M&A news, including AT&T's (T) announcement that it has agreed to acquire T-Mobile USA from Deutsche Telekom for $39 billion in cash and stock.
The purchase price will include a cash payment of $25 billion, with the balance to be paid using AT&T common stock, subject to adjustment.
In other news on the M&A front, Charles Schwab (SCHW) announced a deal to acquire online brokerage services provider optionsXpress Holdings, Inc. (OXPS) for about $1 billion.
Under the terms of the deal, optionsXpress shareholders will receive 1.02 shares of Schwab stock for each optionsXpress share. Based on Schwab's closing stock price on Friday, the transaction values each optionsXpress share at $17.91.
The markets have also benefited from easing concerns about the nuclear crisis in Japan, as officials said progress is being made on efforts to restore power and cooling systems at the earthquake-crippled Fukushima nuclear plant.
Billionaire investor Warren Buffett said that the situation in Japan actually creates a buying opportunity and said that he would not be selling any Japanese stocks because of the recent developments.
The news on the economic front was not as encouraging, however, with a report from the National Association of Realtors showing that existing home sales fell by much more than anticipated in February.
NAR said existing home sales fell 9.6 percent to an annual rate of 4.88 million in February from an upwardly revised 5.40 million in January. Economists had expected sales to drop to 5.15 million from the 5.36 million originally reported for the previous month.
The situation in Libya was also in focus, with news that coalition forces have launched air strikes against the regime of longtime Libyan leader Moammar Qadhafi contributing to a significant increase by the price of crude oil.
Sector News
Oil service stocks saw significant strength on the day, benefiting from the sharp increase by the price of crude oil. With crude for April delivery rising $1.26 to $102.33 a barrel, the Philadelphia Oil Service Index surged up by 3.9 percent.
Within the oil service sector, Oceaneering International (OII) turned in a particularly strong performance, rising by 6.4 percent to reach a record closing high.
Considerable strength was also visible among gold stocks, which moved higher along with the price of the precious metal. The NYSE Arca Gold Bugs Index rose by 2.5 percent, as gold for April delivery climbed $10.30 to $1,426.40 an ounce.
Electronic storage stocks also posted significant gains, resulting in a 2.3 percent advance by the NYSE Arca Disk Drive Index. The gain lifted the index further off the four-month closing low it set last Wednesday.
Natural gas, transportation, and networking stocks also saw notable strength on the day, moving to the upside along with most of the major sectors. On the other hand, modest weakness was visible among banking stocks.
Dow Components
A vast majority of the Dow components ended the day in positive territory, resulting in the strong gain posted by the blue chip index.
Shares of Boeing (BA) saw considerable strength on the day, rising by 3 percent. With the gain, Boeing moved further off the two-month closing low it set last Wednesday.
Alcoa (AA) also turned in a strong performance, with the aluminum giant posting a 2.7 percent gain. Shares of Alcoa also continued to recovery from last Wednesday's two-month closing low.
Exxon Mobil (XOM), General Electric (GE), and Caterpillar (CAT) were among the other blue chip stocks that posted notable gains, with Exxon advancing by 2.5 percent amid the increase by the price of oil.
Meanwhile, shares of Pfizer (PFE) came under pressure over the course of the day, falling by 1 percent after ending Friday's trading at a nearly three-year closing high.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Monday, with Hong Kong's Hang Seng Index advancing by 1.7 percent. The Japanese markets remained closed for a national holiday.
The major European markets also saw significant strength on the day. The U.K.'s FTSE 100 Index advanced by 1.2 percent, while the French CAC 40 Index and the German DAX Index rose by 2.5 percent and 2.3 percent, respectively.
In the bond markets, treasuries saw moderate weakness, as traders moved into riskier assets such as stocks. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed up by 4.6 basis points at 3.323 percent.
Looking Ahead
With no major economic data scheduled to be released on Tuesday, trading is likely to be driven by any developments regarding the situations in Japan and Libya.
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December 19, 2025 15:10 ET U.S. inflation data and interest rate decisions by major central banks were the highlights of this busy week for economics news flow. Employment data and survey results on the housing markets also gained attention in the U.S. In Europe, the European Central Bank and Bank of England announced their policy decisions and macroeconomic projections.