Markets close up on 'Merger Monday'

Stocks closed up 213.9 points Monday, the third straight up-day for the markets as investors jumped back in for stocks that had been beaten down since the market hit a high in mid-April.

The Dow Jones industrial average rose at the opening on Merger Monday excitement over Google and two other companies announcing acquisitions and Japan reporting its economy was stronger than expected after the March earthquake.

The return of what is known as Merger Monday on Wall Street temporarily helped ease worries about the U.S. economy. A report showed that manufacturing in New York has worsened in August for the third straight month.

The Dow Jones industrial average was up 213.9 points, 1.9 percent, at 11,482.9. The S&P 500 index was up 25.7, 2.2 percent, at 1204.5. The Nasdaq composite index was up 47.2, 1.9 percent, at 2,555.2.

The biggest deal announced on Monday was Google Inc.'s $12.5 billion cash purchase of wireless phone maker Motorola Mobility Holdings Inc. It is also the biggest acquisition in Google's history. No. 2 is its $3.2 billion purchase of DoubleClick in 2008. Motorola Mobility's stock jumped percent 56 percent. Google fell 0.7 percent.

Time Warner Cable Inc. said it will pay $3 billion in cash for Insight Communications Co., which has more than 750,000 cable customers in the Midwest. In the energy industry, offshore driller Transocean Ltd. said it will buy Aker Drilling of Norway for $1.43 billion in cash.

Companies across the United States have a record amount of cash that they have accumulated since the recession ended. They have increased their cash reserves every quarter for more than two years, and businesses in the S&P 500 index had a total of $963.3 billion at the end of March, according to the most recent data from Standard & Poor's.

Investors have been waiting for them to use some of that cash on acquisitions, dividend increases and stock buybacks. Many financial analysts believe that companies are more confident about the future if they're willing to buy other businesses. So a series of acquisition announcements tends to send stocks higher.

Last week, the Dow rose or fell by at least 400 points for four days straight. It was the first time that had ever happened. The S&P 500 index also rose or fell by 4 percent for four straight days. It's the first time that happened since November 2008, at the depths of the financial crisis.