Bon-Ton Stores Inc said on Monday it agreed to buy 142 stores from Saks Inc for $1.1 billion in cash. Bon-Ton shares soared 20.4 percent to $20.05 on Nasdaq, while shares of Saks jumped 9 percent to $18.15 on the New York Stock Exchange.
The Dow's biggest lift came from Wal-Mart Stores Inc, which estimated on Saturday that October sales rose 4.3 percent at its US stores open at least a year, beating its forecast. Shares of the world's largest retailer climbed about 4 percent to $47.31 on the NYSE.
"The combination of large deals and a decline in oil prices was the highlight of today's trading session," said Joseph Stocke, a portfolio manager at StoneRidge Investment Partners LLC, in Malvern, Pennsylvania. "The week started on a more positive note, with good news on both corporate and economic fronts."
The Dow Jones industrial average was up 37.30 points, or 0.36 percent, to end at 10,440.07. The Standard & Poor's 500 Index was up 8.60 points, or 0.72 percent, at 1,207.01. The technology-laced Nasdaq Composite Index was up 30.42 points, or 1.46 percent, at 2,120.30.
For the month of October, the Dow fell 1.22 percent, while the S&P 500 slid 1.77 percent and the Nasdaq dropped 1.46 percent.
A slide in oil prices below $60 a barrel also helped push stocks higher. US crude for December delivery slid $1.46 to settle at $59.76 a barrel. After the closing bell, shares of Dell Inc, the world's biggest personal computer maker, fell almost 5 percent to $30.30 as the company warned quarterly results would fall below expectations. Dell closed on Nasdaq at $31.88.
Before Monday's regular trading session opened, the Commerce Department reported US consumer spending rose 0.5 percent last month as post-hurricane insurance payments led to the biggest jump in income in 10 months. The gain in spending matched Wall Street's expectations.
Meanwhile, business activity in the US Midwest expanded faster than expected in October, with new orders surging and hiring picking up as well, another report said. The National Association of Purchasing Management-Chicago business barometer rose in October to 62.9, its highest since July, from 60.5 in September. Economists had forecast the index to slip to 58.0.
In other take-over news, Swiss drug maker Novartis said it had agreed to purchase all the remaining public shares of US vaccine maker Chiron Corp it does not own, offering $45 per share in cash, or a total of $5.1 billion. Chiron shares gained 1.7 percent, or 74 cents, to $44.14 on Nasdaq.
US-traded shares of Canada's No 2 gold producer Placer Dome Inc jumped 20.8 percent, or $3.44, to $19.95 on the NYSE after Barrick Gold Corp said on Monday it would offer $9.2 billion in cash and stock to buy the company.
The Nasdaq's big decliners included shares of Qualcomm Inc, a wireless technology company, which fell 3.2 percent, or $1.31, to $39.76 on Monday after Merrill Lynch downgraded its rating.
Trading was heavy on the New York Stock Exchange with about 1.91 billion shares changing hands, above last year's daily average of 1.46 billion shares. NYSE advancing shares outnumbered decliners by a ratio of more than 3 to 1.
On Nasdaq, 1.92 billion shares were traded, above last year's daily average of 1.88 billion. Nasdaq gainers exceeded decliners by a ratio of almost 3 to 1.