Stocks rebounded sharply Monday as the global market welcomed recent statements by Chinese leaders, who are looking to boost that country’s economy through stimulus and increased foreign trade.
The Dow Jones Industrial Average gained more than 260 points, or 1.5%, to inch closer to a return to the 18,000-point mark. The blue-chip index suffered major losses Wednesday, when it dropped more than 290 points as part of a market-wide sell-off following poor economic reports and investors’ ongoing concerns about the strong U.S. dollar. Last week’s sell-off turned the Dow negative for the year, but Monday’s gains market the Dow’s best daily rise since early-February, putting the index in the black for 2015.
The S&P 500 and the Nasdaq composite also received boosts on Monday, with each index gaining more than 1%. The tech-heavy Nasdaq’s gains put the index roughly 100 points away from the all-time record close (not counting inflation adjustment) it last touched shortly before the dot-com bubble burst in 2000.
The Shanghai composite gained 2.6% during Monday trading after the Chinese government revealed details of a new initiative meant to expand trade between the country and others across Asia, Europe and Africa. Meanwhile, over the weekend, the head of China’s central bank spoke about the growing strength of the U.S. dollar and hinted that there could be further economic stimulus measures to boost the country’s slowing economy.
Monday’s gains in the US came amid a flurry of merger activity from the healthcare industry that sent several stocks soaring. UnitedHealth (UNH) said Monday it is paying $12.8 billion for pharmacy benefits manager Catamaran (TK), while Teva Pharmaceuticals (TEVA) announced its own $3.2 billion deal for Auspex Pharmaceuticals (ASPX). Another pharma company, Hyperion Therapeutics (HPTX), will be acquired by Ireland’s Horizon Pharma (HZNP) for $1.1 billion.
