Alexion Pharmaceuticals Inc was among the top boosts to the S&P 500 and the Nasdaq, surging 31 per cent to a 4-1/2 year high after British drugmaker AstraZeneca said it would buy the US biotech firm. AstraZeneca’s US-listed shares fell 6.1 per cent.
“It is a sign that animal spirits are back … companies are reluctant to do deals when they have a negative outlook on the future, but the fact that you are seeing these types of big deals on merger Mondays is a sign of things to come,” said Thomas Hayes, managing member at Great Hill Capital in New York.
In early afternoon trade, the Dow Jones Industrial Average is 0.1 per cent higher, the S&P 500 was up 0.1 per cent, and the Nasdaq has added 0.7 per cent. At 4.53am AEDT, futures are pointing to a flat start for the ASX.
Uncertainty over more fiscal stimulus had cut short a recent rally in US stocks, after the Senate last week approved a one-week extension of federal funding to avoid a government shutdown and to provide more time for negotiations on coronavirus relief and an overarching spending bill.
“Equities have performed very strongly in what has been a very difficult economic environment … there is some vulnerability there if the market concludes that fiscal support is at its end,” Eric Winograd, senior economist at AllianceBernstein told the Reuters Global Market Forum.
Focus was also on early voting in a pair of US Senate races in Georgia that will determine control of the chamber and heavily influence lawmaking.
E-commerce company Alibaba Group Holding shed 2.6 per cent after China warned its internet majors of more anti-trust scrutiny, slapped fines and announced probes into deals involving Alibaba and Tencent Holdings.
Electric-car maker Tesla rose 4 per cent as anticipation of the firm’s addition to the S&P 500 benchmark next week offset a report of production delays.
Walt Disney fell about 2.7 per cent after rallying on Friday and was the biggest drag on the Dow after BMO Capital Markets downgraded the stock.