Wall Street rises on M&A, strong retail sales

NEW YORK (Reuters) - U.S. stocks rose on Monday as a pair of large acquisition proposals suggested investors see value in certain stocks at current elevated levels in a trend that could carry the market through year end.

Strong October retail sales also helped offset persistent weakness in Internet shares.

Coming off a steep selloff Friday that ended a five-week winning streak, investors also fretted over weakened New York manufacturing data and lingering European sovereign debt woes.

Caterpillar Inc agreed to buy mining equipment maker Bucyrus International Inc for $7.6 billion, sending Bucyrus' shares up 28.7 percent to $89.58. Caterpillar, a Dow component, rose 1.4 percent to $82.18.

Other mining equipment shares gained. Terex Corp climbed 5.1 percent to $25.67, while Joy Global Inc advanced 7 percent to $77.41. Manitowoc Co Inc , which filed a shelf offering Friday, added 1.9 percent to $11.39.

In other M&A action, data storage equipment maker EMC Corp agreed to buy smaller peer Isilon Systems Inc for $2.25 billion. Isilon shot up 28.5 percent to $33.79 and was the second most active stock on Nasdaq. EMC slid 1 percent to $21.50.

"Continued M&A is the best thing going on in the market right now, and I'm expecting this activity to fuel a 100-point rally in the S&P by the end of the year," said Uri Landesman, president of the New York-based hedge fund manager Platinum Partners.

Retail sales posted their largest gain in seven months, boosted by purchases of motor vehicles and building materials. Separately, a gauge of manufacturing in New York state fell in November to its lowest level since April 2009.

"The consumer is one of the stronger areas of the economy right now, so while what we're seeing isn't thrilling, it is a positive datapoint," Landesman said.

A slump in Internet shares limited gains, with Amazon.com Inc falling about 3 percent to $160.69 and Priceline.com Inc off 1.2 percent at $410.

The Dow Jones industrial average <.DJI> was up 54.00 points, or 0.48 percent, at 11,246.58. The Standard & Poor's 500 Index <.SPX> rose 5.13 points, or 0.43 percent, at 1,204.34. The Nasdaq Composite Index <.IXIC> was up 6.51 points, or 0.25 percent, at 2,524.56.

The S&P 500 dipped below its 20-day moving average on Friday for the first time since September 1, but managed to close above it in a sign the level, measured just above 1,194, could provide strong technical support.

Ireland didn't rule out the need to turn to Europe for help in dealing with its debt crisis, but said no application had been made for assistance yet.

Concerns over euro zone sovereign debt have pressured equities in recent weeks along with persistent worries that China may raise interest rates. An offsetting factor was upbeat growth data from Japan.

Lowe's Cos Inc reported a quarterly profit that just beat expectations, but sales missed estimates. Shares of the home improvement retailer rose 2.2 percent to $22.16.

Business inventories rose 0.9 percent in September, compared with the 0.8 percent expectation.

(Editing by Jeffrey Benkoe)

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