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Stocks Finish Higher on M&A News and Vaccine Progress

Stocks finished higher on Monday amid a flurry of mergers and acquisitions news and signs of progress on a coronavirus vaccine.

The Dow Jones Industrial Average closed up 327 points, or 1.18%, to 27,993, the S&P 500 rose 1.27% and the Nasdaq jumped 1.87%.

Last week’s trading was the market’s worst week since March.

Nvidia’s $40 billion acquisition of chip designer Arm Holdings, and Gilead Sciences’ $21 billion purchase of Immunomedics boosted sentiment.

Pfizer’s CEO said the New York healthcare giant should know by the end of October whether its coronavirus vaccine candidate will work.

If Pfizer’s covid-19 vaccine gets approved, it could be distributed in the U.S. by the end of 2020, CEO Albert Bourla said.

Meanwhile, AstraZeneca, which last week paused the late-stage trial it has been conducting with researchers at Oxford University following the unexplained illness of one of its participants, resumed testing over the weekend. American depositary receipts of AstraZeneca finished 0.5% higher at $54.02.

Oracle finished up 4.3% at $59.46 after saying it was part of a consortium presented to the U.S. government to purchase the American assets of China-based video-sharing app TikTok.

Oracle confirmed comments from Treasury Secretary Steve Mnuchin earlier Monday that suggested the cloud and software giant could be considered a technology partner to ByteDance, TikTok’s China-based parent, as it looks to meet a Sept. 20 deadline to sell its U.S. business or face a shutdown in its second-largest market.

ByteDance rejected a competing offer from Microsoft on Sunday, paving the way for an Oracle-led consortium to pick up the U.S. assets.

“There is a fair amount to digest coming off of a weekend of deal machinations and vaccine progress. And as U.S. stocks attempt to rebound from their first two-week losing streak in more than four months, we’re seeing futures point to the positive,” said Chris Larkin, a managing director at E-Trade prior to the market open Monday.

“Though traders should keep in mind that the volatility we’ve seen is to be expected amid record highs, choppy economic data, and an unpredictable election,” he added.

Nvidia will buy Arm Holdings from the British chip designer’s Japanese parent SoftBank for $40 billion.

Nvidia, the computer graphics chip company, will pay $21.5 billion in stock and $12 billion in cash for Arm. SoftBank also may receive up to $5 billion in cash or stock if Arm hits certain financial-performance targets. Nvidia also will issue $1.5 billion in stock to Arm employees.

SoftBank purchased Arm for $32 billion four years ago.

Nvidia shares finished up 5.8% at $514.89. SoftBank shares rose 8% in Tokyo.

Gilead Sciences agreed to acquire biotech Immunomedics, which makes breast-cancer drug Trodelvy, for $21 billion. Immunomedics shares soared 98% to end at $83.65 Monday.

Gilead will pay $88 a share in cash for Immunomedics, more than double its closing stock price Friday of $42.25.