Monday's Stock Market Open: US Equities Higher On China Trade Talk Hopes, New Merger Deals

U.S. equity indexes traded broadly higher Monday as China decided over the weekend to increase penalties on intellectual property theft, a major sticking point of trade talks with the U.S. China also said it would consider lowering the thresholds for criminal punishments for individuals and entities that steal intellectual property.

The Dow Jones Industrial Average gained 123.12 points to 27,998.74 while the S&P 500 was up 19.23 points to 3,129.52 and the Nasdaq Composite Index soared 101.28 points to 8,621.16.

On Saturday Robert O’Brien, the U.S. national security adviser, told reporters at a security conference that a phase one agreement between the U.S. and China remained a possibility by the end of the year.

With respect to intellectual property, David Madden, market analyst at CMC, wrote: “The Chinese government have typically offered to purchase more agricultural goods from the U.S., but that will only gain a limited amount of traction with the Trump administration, but genuine progress regarding [intellectual property] could help get phase one wrapped up.”

Equities also received a boost from a flurry of merger deals.

Ebay (EBAY) agreed to sell StubHub to ticket marketplace Viagogo for $4.05 billion in cash. “We concluded that this was the best path forward for both eBay and StubHub," said Scott Schenkel, eBay's interim CEO.

Charles Schwab (SCHW) agreed to acquire TD Ameritrade Holding (AMTD) in an all-stock deal valued at $26 billion. The combined company will have more than $5 trillion in client assets.

Novartis (NVS) agreed to buy cholesterol-drug maker the Medicines Co. (MDCO) for $9.7 billion, including outstanding stock options and convertible debt.

LVMH Moët Hennessy Louis Vuitton reached an agreement to buy Tiffany & Co. (TIF) for $16.2 billion. “This transaction, which occurs at a time of internal transformation for our legendary brand, will provide further support, resources and momentum for those priorities as we evolve toward becoming the next generation luxury jeweler,” said Alessandro Bogliolo, chief executive officer of Tiffany.

On the bad news front: Uber Technologies Inc. (UBER) was denied a new license to operate in London due to the company's failure to adequately address various safety issues.

Pro-democracy candidates won in a landslide in Hong Kong elections amid record voter turnout.

The Chicago Fed National Activity Index slowed to -0.71 in October versus a consensus forecast of -0.2.

Federal Reserve Chairman Jerome Powell was to speak Monday night at the Greater Providence Chamber of Commerce annual dinner in Providence, R.I.

Overnight, Asian markets closed broadly higher with the Hang Seng surging 1.5% while Japan's Nikkei 225 gained 0.78% and China's Shanghai Composite added 0.72%.

European markets are higher led by the FTSE 100 which gained 0.95% while Germany's DAX rose 0.63% and France's CAC 40 climbed 0.54%.

Crude oil futures fell 0.23% to $57.64 per barrel and Brent crude dropped 1.85% at $62.22. Gold futures were down 0.43%.

The euro was down 0.1% to $1.101 while the pound sterling gained 0.41% to $1.2885.