The Dow Jones industrial average (^DJI) rose 140 points or 0.9 percent, to 15,063, the Standard & Poor's 500 index (^GPSC) gained 16 points or 1 percent, to 1,671 and the Nasdaq composite index (^IXIC) added 46 points or 1.3 percent, to 3,706.
Two big deals came down the pike: Luxury retailer Neiman Marcus was sold for $6 billion, and Koch Industries bought electronics component maker Molex (MOLX) for $7.2 billion.
Homebuilding stocks were some of the biggest gainers in the S&P 500 index after Hovnanian Enterprises (HOV) said home prices are rising and its backlog jumped almost 27 percent from a year earlier.
The S&P 500 has risen five straight sessions for a near 2 percent advance, but analysts said numerous events, from Syria to a possible trimming of stimulus by the Federal Reserve and the debt ceiling debate, could easily create volatility.
Economists expect the Fed to announce next week that it will start to pare back its $85-billion monthly bond purchases aimed at stimulating the economy.
More Stocks in the News:
- Shares of Apple (AAPL) gained 1.6 percent to $506.16 to close above $500 a share -- the first time it's done so since Aug. 26. Apple is expected to announce a new iPhone on Tuesday.
- Delta Air Lines (DAL) jumped 9.3 percent to $21.74 after news the carrier 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 (JPM) analyst Jamie Baker estimated that inclusion in the index will add demand for almost 89 million Delta shares.
- U.S.-listed shares of BlackBerry (BBRY) gained 6.4 percent to $11.53 after the Sunday Times reported the company's largest shareholder, Prem Watsa, had assembled billions in backing from Canada's biggest pension funds for a possible rescue deal for the battered smartphone maker.
- Isis Pharmaceuticals (ISIS) soared almost 14 percent to $31.80 after the company said it had reached a collaboration with Biogen Idec (BIIB) on treatments for neurological disorders. Biogen shares edged up 1.6 percent to $228.86.
- The Bureau of Labor Statistics releases its Job Outlook and Labor Turnover Survey for July at 10 a.m.