IBM's big acquisition of cloud computing software company Red Hat for $34 billion led to a stock surge Monday, particularly for tech companies.
The deal, announced late Sunday, pushed the Nasdaq and S&P 500 up about 1%. The Dow, which includes IBM (IBM) as one of its 30 stocks, rose nearly 200 points, or 0.8% -- despite the fact that IBM sank 2% to a new multi-year low.
As of late Monday morning, IBM was one of just two Dow stocks in the red. Boeing (BA) was the other.
The Dow's gains were led by other tech giants, including IBM rival Microsoft (MSFT), as well as Apple (AAPL), Intel (INTC) and Cisco (CSCO).
Concerns that Big Blue may be paying too much for Red Hat (RHT) clearly didn't hurt the broader market. The IBM deal was also the main bit of news since there were no significant earnings or economic reports of note Monday.
Monday's rally is an encouraging sign after last week's extreme volatility, when stocks fell for a variety of reasons.
Disappointing earnings and guidance from industrial bellwethers 3M (MMM) and Caterpillar (CAT) played a part, as did worries that tech giants like Netflix (NFLX) and Amazon (AMZN) were starting to look overvalued.
Weak housing market data hurt big bank stocks as well.
To top it all off, investors remain nervous about the trade tension with China, a stronger dollar eating into profits, and rising interest rates from the Federal Reserve.
But earnings will once again take center stage later this week. Apple, General Electric (GE), General Motors (GM), Coca-Cola (KO), Starbucks (SBUX), Kraft Heinz (KHC), Chevron (CVX) and Exxon Mobil (XOM) are among the most notable firms to report results.
Wall Street will also be watching Friday's jobs report very closely for signs of stronger wage growth and a possible uptick in inflation.
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