EDITOR'S NOTE
They don’t call it “Merger Monday” for nothing.
A slew of corporate deals was announced to start the week, lifting sentiment across the broader market.
In the energy sector, Devon Energy and WPX Energy said they will move forward with a merger of equals. The deal would create a company with an enterprise value of about $12 billion. Caesars Entertainment also disclosed a cash offer to buy London-based sports betting site William Hill for £2.9 billion ($3.7 billion). Meanwhile, Cleveland-Cliffs announced it will buy ArcelorMittal’s U.S. operations for $1.4 billion.
All of those stocks except William Hill were higher on Monday along with the S&P 500. The broader market index rallied more than 1.5% for its biggest one-day gain since Sept. 9, when it popped 2%. The rally also builds on Friday’s sharp gains.
Equities also got a boost as House Speaker Nancy Pelosi, D-Calif., indicated that a last-minute coronavirus aid deal remains on the table as House Democrats try to forge ahead on a smaller relief package costing about $2.4 trillion. Still, that price tag is well above what Republican leadership has indicated it will support for new legislation.
"We are very cautious in our optimism for a bill before November, but more confident that support will come either in a lame duck session or after inauguration," said Katie Nixon, CIO at Northern Trust Wealth Management, in a note.
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