Investors are clearly eager and optimistic for the second-quarter earnings season to kick off. This was partly why the broad-based S&P 500 (SNPINDEX:^GSPC) reversed its early losses and powered higher as soon as midday hit.
I believe "merger Monday" also played a big part in exciting investors and pushing the markets higher. Earlier this morning, Dow Jones component General Electric (NYSE:GE) agreed to purchase Lufkin Industries, an oil-field and power transmission products provider, for $3.3 billion -- or $88.50/share -- which was a 38% premium to its Friday close. A surge in M&A activity will often be looked upon by Wall Street as an encouraging sign that businesses are more willing to take on risk.
All told, the S&P 500 ended the day higher by 9.79 points (0.63%) to close at 1,563.07. This was definitely a nice move to start the week, but three components within the index soared well beyond the 0.63% gain the index turned in.
Today's surprising winner was the downtrodden Advanced Micro Devices (NASDAQ:AMD), which jumped a whopping 13.1% after Microsoft announced that it would be using AMD chips in its next-generation Xbox gaming consoles. With product design wins being so few and far between lately for AMD given the company's pretty hefty job and expense cutbacks, this is pretty big news -- even if the video game industry has been suffering. AMD still needs to do a lot more than just penetrate the video game industry if it hopes to right the ship, but today's news is definitely positive for shareholders.
Oil and gas exploration and production company WPX Energy (NYSE:WPX) is becoming a familiar visitor to this list, up another 5.3% after announcing that its Niobrara Shale discovery well in the Piceance Basin had eclipsed 1 billion cubic feet of natural gas production in a little more than 100 days of production. A combination of higher natural gas prices in recent weeks coupled with the strong possibility that demand will increase as President Obama pushes for cleaner-burning energy usage could make WPX one of the steals of the sector.
Finally, energy-drink maker Monster Beverage (NASDAQ:MNST) charged 4.7% higher after its board of directors approved a $200 million share repurchase program. The previous share repurchase program of $250 million had been used in its entirety. This move should somewhat help bolster shares that have suffered due to an FDA probe into the safety of its energy drinks and the threat of increased government regulation looming over the entire sector. As for me, I still see multiple reasons to avoid Monster altogether.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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