M&A Activity Buoys Stocks

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Halliburton (HAL) reported earnings of $1.62 per share, vs. 55 cents a year ago, on a 20% rise in revenue. Second quarter earnings include a net gain of $933 million from the separation of KBR (KBR). The stock was up 3.2%.

It was another merger Monday. Transocean (RIG) and Globalsantafe Corp. (GSF) agreed to merge and will create a company worth $48 billion. For each current share, Transocean stockholders will get $33.03 and 0.7 shares of the combined company, while Globalsantafe shareholders get $22.46 in cash and 0.48 shares of the combined company. Oil and gas drilling stocks moved up 4% Monday.

United Rentals (URI) agreed to be acquired by affiliates of private equity firm Cerberus Capital Management in a $6.6 billion deal, including about $2.6 billion in debt. The terms are $34.50 cash for each United Rental share, which closed at $32.37 on Friday.

Opsware (OPSW) agreed to be acquired by Hewlett-Packard (HPQ) in a $1.6 billion deal, or $14.25 per share, a 39% premium over Friday's closing price.

Arrow International (ARRO) agreed to be acquired by Teleflex (TFX) in a $2 billion deal, or $45.50 per Arrow share, a 17% premium over Friday's close.

Foxhollow Technologies (FOXH) agreed to be bought by ev3 Inc. (EVVV) in a $780 million cash and stock deal.

European stock markets were higher on Monday. In London, the FTSE 100 index moved up 0.6% to 6,624.4. Germany's DAX index was up 0.88% to 7,944.21. In Paris, the CAC 40 index was up 0.87% to 6,009.16.

Asian markets traded were mixed on Monday. In Japan, the Nikkei index was off 1.07% to 17,963.64. In Hong Kong, the Hang Seng index rose 0.32% to 23,365.56. In China, the Shanghai Composite index climbed 3.81% to 4,213.36.

Treasury Market

Treasuries, which soared on Friday, started the week by easing a bit. The 10-year note was down 03/32 to 96-14/32 for a yield of 4.96%; the 30-year bond fell 05/32 to 95-06/32 for a yield of 5.07%.

S&P says Monday was a "fairly quiet day of trading." Trading could remain subdued until home sales data is released on Wednesday and Thursday.

Steverman is a reporter for BusinessWeek's Investing channel.