'Merger Monday' Improves Dow 214 Points

The Dow Jones industrial average rose 214 points on Monday as an optimistic tone was set by company mergers. Wall Street’s longstanding tradition of announcing acquisitions on Mondays has returned, and the method appears to be working.

The biggest merger was Google’s agreement to buy Motorola Mobility for $12.5 billion. Shares of Motorola Mobility surged with the activity, and rose 56 percent. The merger led to Standard & Poor 500’s index rising and also boosted the indexes of Research in Motion and Nokia Corp.

Time Warner Cable Inc. agreed to pay $3 billion for Insight Communications Co., who hosts 750,000 cable clients in the Midwest.

Bank of America sold its credit card business in Canada to TD Bank Group for $8.6 billion, and is removing the business from the U.K. and Ireland. Bank of America enjoyed an 8 percent increase in stock after the move.

Transocean, an offshore drilling company, experienced a 3 percent rise in its shares after announcing intentions to buy Aker Drilling in Norway for $1.4 billion, the New York Times has reported.

Friday was relatively quiet on Wall Street after a week of roller-coaster stock prices, with indexes swinging wildly between gains and losses of 4 percent and 5 percent a day.

Last week’s major losses are erased, and major indexes are experiencing a 2 percent rise. The markets have stabilized in the past three days, but financial analysts are not confident that stocks have fully settled down following last week’s fluctuations.

The merger activity along with news that Japan’s economy shrank less than expected prior to the earthquake and tsunami of March 11 have investors far more upbeat about the market.

Last quarter, Japan’s gross domestic product had shrunk by 0.3 percent, but Asian markets ended with solid gains.