Winning day on Wall Street

Dealmaking, upbeat earnings from Merck helps Dow rebound from last Friday's selloff.

By David Ellis, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Stocks gave back some early session gains but finished higher Monday, following some merger activity and positive earnings news from the drugmaker Merck.

The Dow Jones industrial average (up 83.48 to 13,934.56, Charts) soared by as much as 122 points, but finished up 93 points, or nearly 0.7 percent, based on early tallies.

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The broader S&P 500 (up 6.82 to 1,540.92, Charts) jumped nearly 0.5 percent, while the tech-fueled Nasdaq (up 3.25 to 2,690.85, Charts) rose just 0.1 percent.

Oil prices fell sharply, as U.S. light crude for September lost 90 cents to $74.89 a barrel on the New York Mercantile Exchange.

Treasury prices edged lower, leaving the yield on the 10-year note at 4.96 percent, up slightly from 4.95 percent reached late Friday. Bond prices and yields move in opposite directions.

The dollar was stronger against the euro and the yen. COMEX gold for August fell $3.20 to $681.50 an ounce.

Here's what was moving before the close:

Stocks moved higher after offshore drilling firms Transocean and rival GlobalSantaFe said Monday that they agreed to a merger, giving the companies a combined market capitalization of about $48 billion.

Shares of both Transocean (up $6.18 to $116.15, Charts) and GlobalSantaFe (up $3.73 to $78.47, Charts) climbed more than 5 percent on the New York Stock Exchange.

Private equity firm Cerberus Capital Management also announced a $4 billion deal for the equipment rental company United Rentals (up $0.64 to $33.01, Charts), representing a 6.6 percent premium to the company's Friday closing price.

Better than expected earnings from companies such as Merck and energy services firm Haliburton (up $1.33 to $37.90, Charts, Fortune 500) also provided support to stocks in a session with no major economic reports on tap.

Dow component Merck (up $3.51 to $52.53, Charts, Fortune 500) shares jumped 7 percent after the company reported a 12 percent increase in profits and raised its 2007 earnings forecast.

So far, the second quarter earnings season has gone rather well. To date, 129 companies - just over a quarter of the S&P 500 - have reported quarterly results, with 60 percent of those firms beating Wall Street projections, according to Thomson First Call.

Stocks retreated Friday, with the 30-stock Dow falling nearly 150 points amid continued fears about the housing market and some weak corporate results from Dow component Caterpillar (down $1.26 to $81.94, Charts, Fortune 500) and Web search giant Google (down $7.62 to $512.50, Charts, Fortune 500).

But last week's selloff and Monday's 100-point plus gain, has become commonplace in recent weeks as Wall Street has struggled with corporate earnings, the subprime mortgage sector and interest rates.

Todd Leone, head trader at Cowen & Co., suspected that the recent volatility would not dissapear anytime soon, or at least until Wall Street returns from "summer vacation" in September.

"Part of it is that 100 points isn't that big of a move anymore," he said. "I think the market is just trying to find a range to trade within."

In other corporate news, British bank Barclays (up $1.70 to $60.33, Charts) sweetened its takeover offer for ABN Amro (up $0.00 to $50.84, Charts) to $93 billion, although the new offer still falls short of the bid from a rival group led by Royal Bank of Scotland.

Computer maker Hewlett-Packard (down $0.16 to $48.38, Charts, Fortune 500) announced plans Monday to purchase Opsware Inc. (up $3.73 to $14.01, Charts) for $1.6 billion, in an effort to expand its business software holdings.

Netflix (down $2.41 to $17.22, Charts) shares tumbled 12 percent after the video rental company cut prices Sunday on two of its subscription plans by $1. Netflix is scheduled to report earnings after the closing bell Monday.

Other earnings due after the bell include Dow component American Express (up $0.05 to $64.56, Charts, Fortune 500), as well as tech bellwether Texas Instruments (up $0.10 to $38.11, Charts, Fortune 500).

Market breadth was positive. Decliners barely beat advancers on the New York Stock Exchange on volume of 1.35 billion shares. Losers edged out winner on the Nasdaq on volume of 1.92 billion shares. Top of page

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

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Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.