On Tuesday, stocks rebounded from their recent slump, with both the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) posting gains.

Today's stock market

Index Percentage Change Point Change
Dow  0.44%  92.80
S&P 500  0.45%  10.96

Data source: Yahoo! Finance.

Technology stocks that had weighed down the market since Friday bounced back, with the Technology Select Sector SPDR ETF (NYSEMKT:XLK) adding 0.7%. Energy stocks joined the party as crude oil prices advanced today, and the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT:XOP) rose 2.6%

As for individual companies, Verizon Communications (NYSE:VZ) completed its acquisition of Yahoo!, and Synaptics, Inc. (NASDAQ:SYNA) announced two acquisitions to better position itself in the Internet of Things.

New York Stock Exchange

Image source: Getty Images.

Verizon closes Yahoo! deal

Verizon announced the closure of its acquisition of the operating business of Yahoo!, creating a new subsidiary called Oath. Oath will bring together a number of online brands that Verizon has been accumulating, including AOL.com, the Huffington Post, TechCrunch, and Tumblr. The deal was announced last July. As a result of the transaction, Yahoo! CEO Marissa Mayer will be resigning.

Leading the new unit will be Tim Armstrong, the former CEO of AOL. In the press release, Armstrong said:

We're building the future of brands using powerful technology, trusted content and differentiated data. We have dominating consumer brands in news, sports, finance, tech, and entertainment and lifestyle coupled with our market leading advertising technology platforms. Now that the deal is closed, we are excited to set our focus on being the best company for consumer media, and the best partner to our advertising, content and publisher partners.

Verizon's move gives the company the ability to offer an advertising platform with an extensive reach. Yahoo!'s global audience is estimated at a billion monthly active users, 60% of which are mobile. 

Telecom companies have sought to expand beyond being merely pipelines for distribution -- businesses that could eventually become a commodities -- to having valuable sources of content as well. Verizon hopes that the combination will generate more traffic to its media sites and give it an advertising business that can compete with the likes of Facebook and Alphabet. With the company struggling to grow revenue from its traditional wireless subscriber business, it's easy to see why a strong advertising business would be an important asset.

Synaptics snaps up two chip operations

Apple supplier Synaptics announced the acquisition of two businesses: Conexant Systems and the multimedia solutions business of Marvell Technology Group. Synaptics currently specializes in display drivers and touch-based human interfaces such as touch screens and fingerprint sensors for smartphones, tablets, and automotive displays. The acquisitions expand the company's business into voice and video interfaces, which Synaptics hopes will help it establish a foothold into the rapidly growing markets for voice-activated personal assistants and virtual reality systems. Investors were evidently unimpressed and perhaps worried about the complexity of buying two significant businesses at once; shares fell 7.9%. 

The Conexant unit was originally spun off from Rockwell International in 1999 and has gone through a series of transformations, including declaring Chapter 11 bankruptcy in 2013. The company that emerged chose to focus on far-field voice detection -- the ability to pick out human speech from background noise -- which turned out to be prescient, given the rise of voice-activated personal assistants, remote control devices, automotive voice controls, and other such devices. Conexant's technology can be found in Amazon's popular Echo family of voice-activated assistants. 

The multimedia unit from Marvell was originally spun off from National Semiconductor in 2006, and it sells video and audio processing solutions that are used in set-top boxes, media streaming devices, virtual/augmented reality platforms, and smart speakers.

The deals together will cost Synaptics $395 million in cash and $39 million in stock and should add $200 million to $250 million in annual revenue, which the company expects to grow at a 15% annual rate and deliver a gross margin of around 50%. More importantly for the long term, Synaptics expects these deals to expand its addressable market from $7.5 billion today to $10.3 billion by 2020, diversify the company away from its dependence on smartphones, and establish a foothold in the Internet of Things.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Jim Crumly owns shares of AAPL, GOOG, Alphabet GOOGL, Amazon, FB, and Verizon Communications. Jim Crumly has the following options: long January 2019 $80 calls on FB. The Motley Fool owns shares of and recommends AAPL, GOOG, GOOGL, Amazon, FB, and Verizon Communications. The Motley Fool recommends YHOO. The Motley Fool has a disclosure policy.