Markets rise on mergers, homebuilder’s outlook

Associated Press file photo -- A worker installs a roof on a house in July in New Paltz, N.Y. Home building companies' stocks were among the biggest gainers Monday in the S&P 500. Show caption
Associated Press file photo -- A worker installs a roof on a house in July in New Paltz, N.Y. Home building companies' stocks were among the biggest gainers Monday in the S&P 500.

The stock market got a boost on Monday from mergers, homes and phones.

Stocks posted their biggest gains in almost two months. Two big deals suggested growing confidence in the economy: Luxury retailer Neiman Marcus was sold for $6 billion, and Koch Industries bought electronics component maker Molex for $7.2 billion.

“I think it’s really exciting for just about everybody to see that big of a deal go through,” said Kim Forrest, senior analyst with portfolio management firm Fort Pitt Capital Group in Pittsburgh.

Homebuilding stocks were some of the biggest gainers in the Standard & Poor’s 500 index after Hovnavian Enterprises said home prices are rising and its backlog jumped almost 27 percent from a year earlier.

Hovnanian rose 11 cents, or 2.2 percent, to close at $5.15. PulteGroup, D.R. Horton and Lennar also gained. Homebuilder MDC Holdings rose $1.72, or 6.2 percent, to $29.37 after an upgrade from a Citi analyst.

Homebuilding stocks have had a volatile year. Investors have been bullish because the housing market is recovering, but worried that rising interest rates make mortgages more expensive for home buyers.

Apple rose back above $500 per share. It last closed above that level on Aug. 26. Apple gained $7.95, or 1.6 percent, to $506.17 on Monday in advance of an expected iPhone announcement on Tuesday.

The Dow Jones industrial average rose 140.62 points, or 1 percent, to 15,063.12. The Dow hit an all-time high of 15,658 on Aug. 2.

But worries about Syria and rising interest rates pushed stocks down since then. The last time the Dow closed above 15,000 was Aug. 23.

The S&P 500 index rose 16.54 points, or 1 percent, to 1,671.71. The Nasdaq composite rose 46.17 points, or 1.3 percent, to 3,706.18. Both the Dow and the S&P 500 had their biggest daily gains since July 11.

All 10 industry groups in the S&P 500 rose. The index rose for the fifth day in a row, the longest since eight days of gains in July.

Delta Air Lines jumped $1.87, or 9.4 percent, to $21.76 after news that it would be added to the S&P 500 index. That benefits Delta because mutual funds and other investors that track the S&P 500 will now have to buy Delta’s stock. JPMorgan analyst Jamie Baker estimated that inclusion in the index will add demand for almost 89 million Delta shares.

Stocks in Asia were lifted by Tokyo’s win for the 2020 Summer Olympics, Chinese export growth and an election victory by Australia’s conservative coalition.

The coalition supports repealing a 30 percent tax on coal and iron ore miners’ profits, which could help mining and other raw material companies. Caterpillar, which makes mining gear used in China and Australia, rose $2.20, or 2.6 percent, to $85.59, and mining company Cliffs Natural Resources was up $1.33, or 6.1 percent, to $23.18.

The positive news out of the Asia-Pacific region helped outweigh worries about rising interest rates and Syria, said Doug Cote, chief market strategist at ING U.S. Investment Management. “The risk of taking action seems too great for them to act,” he said. “I’m watching it daily, but I’m certainly not worried about it.”