US stocks rallied on Monday, erasing last week's losses, after a raft of big merger and acquisition announcements spurred buying momentum.
The Dow Jones Industrial Average leapt 213.88 points (1.90 per cent) to finish at 11,482.90.
The broader S&P 500 was up 25.68 points (2.18 per cent) at 1,204.49, and the tech-rich Nasdaq Composite gained 47.22 points (1.88 per cent) to 2,555.20.
After a roller-coaster week dominated by US and European public debt problems, Wall Street bulls were ready to take the markets higher.
"It is too soon to say that a bottom is in place, but the market is obviously showing encouraging signs that the worst of the selling is behind us," said Scott Marcouiller at Wells Fargo Advisers.
Stocks piled up gains "as investors seek bargains following three weeks of losses," he added.
It was the third winning session for Wall Street, returning the indices to above the levels they held on August 5 just before Standard & Poor's downgraded the US credit rating, sending global markets into a tailspin.
"The market should continue to be fairly volatile but certainly the trend is looking more promising than it did in the last couple of weeks," said Andrew Fitzpatrick, at Hinsdale Associates.
Investors brushed off a dismal manufacturing report from the Federal Reserve Bank of New York. Its manufacturing index reading for New York state slumped 3.8 points in August from July, to negative 7.7, the third straight month in negative territory.
"A plethora of M&A news is helping overshadow an unexpected drop in a read on manufacturing activity in New York," Charles Schwab analysts said.
Internet giant Google unveiled its largest acquisition to date, announcing a deal to buy US handset maker Motorola Mobility for $US12.5 billion ($A12.08 billion).
Google will pay $US40.00 ($A38.64) per share in cash, a 63 per cent premium over its closing price Friday. Google fell 1.10 per cent to $US557.55 ($A538.64); MM skyrocketed 55.8 per cent to $US38.12 ($A36.83).
Bank of America said it would sell its $US8.6 billion ($A8.31 billion) credit card portfolio in Canada to TD Bank Group and would exit its credit card businesses in Britain and Ireland. BofA soared 7.9 per cent to $US7.76 ($A7.50).
Pfizer leaped 2.7 per cent to $US18.34 ($A17.72) after it won a patent-infringement case in a US court against Israeli rival Teva Pharmaceuticals.
The court ruling prevents Teva from making a generic form of Viagra until October 2019.
Boeing added 1.5 per cent at $US62.70 ($A60.57) after announcing a firm order for five 777-300 Extended Range aircraft from Air Lease Corporation.
Bond prices fell. The yield on the 10-year Treasury rose to 2.29 per cent from 2.24 per cent Friday, while that on the 30-year Treasury climbed to 3.75 per cent from 3.70 per cent.
Bond prices and yields move in opposite directions.
