Bulls make a comeback

NEW YORK (CNNMoney.com) -- Stocks surged Monday, recharging the rally after a one-week selloff, as investors welcomed a spate of corporate deals and geared up for Tuesday's congressional elections.

The tech-fueled Nasdaq composite (up 39.04 to 2,365.95, Charts) jumped around 1.5 percent. The Dow Jones industrial average (up 119.51 to 12,105.55, Charts) climbed around 1 percent and the broader S&P 500 (up 16.48 to 1,379.78, Charts) index gained 1.1 percent.

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The gains snapped a six-session losing streak for the Dow, the longest since mid-2005.

Treasury prices inched higher, lowering the corresponding yields. Oil prices gained and gold prices fell.

The advance was sparked by a combination of factors, said Todd Salamone, director of trading at Schaeffer's Investment Research. He cited the day's corporate news and reassuring morning comments from former Federal Reserve Chairman Alan Greenspan, who said the worst is over for the U.S. housing market.

Salamone also said investors Monday were reacting in anticipation of Tuesday's elections.

"I think the prospect of that uncertainty (about the elections) being removed is helpful to the market," he said.

Stocks slipped Friday at the end of a tough week after upbeat reads on the labor market and the service sector sparked bets that the economy is stronger than had been thought and the Federal Reserve won't cut interest rates soon.

"Today it's all deals, deals, deals," said James Awad, president at Awad Asset Management. "That, and some relief that there's a tightening of the polls."

Some polls released Monday suggested that while the Democratic Party was likely to take control of the House of Representatives, it was not as likely to also take control of the Senate.

This would be comforting to investors, Awad said, as there's "no chance of either party running away with an agenda that's not centrist."

Last week, traditionally Republican Wall Street may have been concerned by polls suggesting the GOP might lose control of both chambers of Congress, he added.

Last week's declines followed an unusually strong October on Wall Street in which the Dow industrials closed at record highs in 13 of 18 sessions and the S&P 500 and Nasdaq hit more than 5-1/2 year highs.

On Monday, investors seemed willing to resume the upward trend.

Merger Monday brought at least five big deals, spread out across a variety of industries.

Four Seasons Hotels (up $18.63 to $82.50, Charts) said it received a $3.7 billion management-led buyout offer. That sent shares up 29 percent.

Abbott Laboratories (down $0.17 to $47.47, Charts) said it will buy Kos Pharmaceuticals (up $26.97 to $77.06, Charts) for $3.7 billion. Abbott shares were little changed on the session, while Kos shares jumped nearly 54 percent.

OSI Restaurant Partners (up $7.32 to $39.75, Charts) agreed to a $3.2 billion buyout from a private equity group that includes its founders. The parent of the Outback Steakhouse chain rallied almost 23 percent.

McKesson, a prescription drug distributor, said it was buying Per-Se Technologies, a health administration company, for about $1.23 billion. McKesson (up $1.17 to $49.69, Charts) added about 1 percent, while Per-Se (up $3.10 to $27.55, Charts) added 12.7 percent.

Swift Transportation (up $5.79 to $29.84, Charts) said it has received a $2.2 billion buyout offer from its largest shareholder and former CEO. Shares of the trucking company surged 24 percent and helped boost the Dow Jones Transportation (up 82.27 to 4,694.96, Charts) average by 1.8 percent.

Among other movers, a variety of big tech stocks jumped.

Cisco Systems (up $0.91 to $24.68, Charts) popped 3.8 percent ahead of its quarterly earnings report Wednesday.

Apple (up $1.42 to $79.71, Charts), Intel (up $0.31 to $20.82, Charts), Oracle (up $0.32 to $18.10, Charts) and Yahoo! (up $0.41 to $26.59, Charts) all gained as well.

Among blue chips, 26 out of 30 Dow components rose, led by American Express (up $1.10 to $58.16, Charts), United Technologies (up $1.18 to $65.15, Charts), McDonalds (up $0.59 to $41.83, Charts) and DuPont (up $0.83 to $45.91, Charts).

Market breadth was positive. On the New York Stock Exchange, winners beat losers three to one on volume of 1.52 billion shares. On the Nasdaq, advancers topped decliners by more than two to one as almost 1.93 billion shares changed hands.

U.S. light crude oil for December delivery gained 88 cents to settle at $60.02 a barrel on the New York Mercantile Exchange.

Investors also took in comments from Chicago Federal Reserve Bank President Michael Moskow, who becomes a voting member of the Fed's policy committee in January. Moskow said more interest-rate hikes may be necessary to help keep inflation under control.

Treasury prices inched higher, lowering the yield to 4.70 percent from around 4.71 percent. Bond prices and yields move in opposite directions.

In currency trading, the dollar was little changed versus the euro and rose versus the yen.

COMEX gold fell $1.30 to settle at $627.90 an ounce.

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