By Angela Moon
NEW YORK (Reuters) - Stocks rose on Monday with the Dow Jones industrial average hitting a new intraday high, lifted by better than expected earnings from Citigroup and more deals in the healthcare space.
Boosting investors' confidence that the market is still attractive to invest, Shire Plc, which sells drugs for rare diseases, succumbed to an increased 31 billion pound ($53 billion) takeover offer from Abbvie Inc on Monday.
U.S.-listed shares of Shire rose 2.2 percent to $254.63 while Abbvie shares fell 0.5 percent to $54.71.
Generic drugmaker Mylan Inc said it would buy Abbott Laboratories' specialty and branded generics business outside the United States in an all-stock transaction valued at about $5.3 billion. Mylan shares advanced 2.2 percent to $51.30 while Abbott shares rose 0.8 percent to $41.62.
Citigroup Inc shares rose 3.2 percent to $48.49 as one of the top boosts to the S&P 500 after it posted second-quarter earnings and agreed to pay $7 billion to settle a U.S. government investigation into mortgage-backed securities. The S&P financial index gained 0.6 percent.
Citigroup is the first major commercial bank to report, and with today's earnings, the trend seems to be pointing that financials will have a good earnings season, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
Goldman Sachs analyst David Kostin raised his 2014 target for the S&P 500 to 2,050 from 1,900, citing expectations that yields on the 10-year Treasury note around 3 percent will continue to push investors into stocks for higher returns.
Earnings season will pick up speed this week, with 59 S&P 500 components scheduled to report. S&P 500 profits are seen growing 6.2 percent in the second quarter, according to Thomson Reuters data, down from the 8.4 percent growth forecast at the start of April. Revenue is seen up 3.1 percent.
In order to justify current stock prices, analysts are looking to earnings to confirm the economy recovered in the second quarter from the harsh winter.
The Dow Jones industrial average rose 121.37 points or 0.72 percent, to 17,065.18, the S&P 500 gained 10.29 points or 0.52 percent, to 1,977.86 and the Nasdaq Composite added 28.41 points or 0.64 percent, to 4,443.90.
The Dow hit a record intraday high of 17,088.43.
Engineering design firm AECOM Technology Corp on Sunday said it would pay about $4 billion to acquire engineering and construction services firm URS Corp. URS shares jumped 11.2 percent to $57.84 and AECOM gained 8 percent to $34.30.
(Reporting by Angela Moon; Editing by Nick Zieminski)
