Stocks rally on merger activity; dollar gains

Mon Mar 30, 2015 4:40pm EDT
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By Herbert Lash

NEW YORK (Reuters) - The dollar gained and global equity markets surged on Monday on merger activity among drugmakers on both sides of the Atlantic, while Chinese stocks hit a seven-year high on a government plan to create a modern Silk Road trade route.

Major U.S. and European indexes rallied more than 1 percent on a spate of deals as the dollar rose against other currencies on the view the Federal Reserve will raise interest rates this year.

Health insurer UnitedHealth Group Inc (UNH.N: Quote) agreed to buy Catamaran Corp CTRX.O CCT.TO in a deal worth about $12.8 billion. Also Monday, Israel's Teva Pharmaceutical Industries (TEVA.N: Quote) (TEVA.TA: Quote) said it would buy U.S. biopharmaceutical firm Auspex Pharmaceuticals Inc ASPX.O for $3.5 billion, and Ireland's Horizon Pharma Plc (HZNP.O: Quote) agreed to buy U.S. drugmaker Hyperion Therapeutics Inc HPTX.O for about $1.1 billion.

Earlier, China unveiled details of an ambitious plan to improve links from Asia to Europe and Africa that President Xi Jinping said in a decade would generate $2.5 trillion in annual trade with the countries involved.

Germany's DAX index .GDAXI rose 1.8 percent, to about 1 percent below its all-time high, while the FTSEurofirst index .FTEU3 of 300 leading European companies gained 1.18 percent to close at 1,596.31.

MSCI's all-country world index .MIWD00000PUS rose 0.75 percent, while its emerging markets index .MSCIEF gained 1.16 percent.

On Wall Street, the Dow Jones industrial average .DJI closed up 263.65 points, or 1.49 percent, to 17,976.31. The S&P 500 .SPX rose 25.22 points, or 1.22 percent, to 2,086.24 and the Nasdaq Composite .IXIC gained 56.22 points, or 1.15 percent, to 4,947.44.

"A lot of it is certainly merger-related, there's no question about that, and that gins up confidence among everyday investors. If the insiders are willing to make big acquisitions, why not the rest of us?" said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.   Continued...

Traders work on the floor of the New York Stock Exchange March 26, 2015. REUTERS/Brendan McDermid