Stocks close higher amid flurry of mergers; Dow up 77 points

Stocks rose  Monday as investors seemed heartened by a flurry of activity in the mergers and acquisitions space.

The Dow Jones industrial average gained 77 points, or 0.4%, to close at 18,223. The Standard & Poor's 500 index increased 0.5% to 2151 and the Nasdaq composite index jumped 1% to 5310.

The gains came despite a slightly negative investor reaction to AT&T's $85.4 billion deal for Time Warner, which was officially announced Saturday.

AT&T (T) and Time Warner (TWX) stocks slipped 1.9% and 2.4%, respectively. Time Warner is trading significantly below its sale price of $107.50 per share, potentially reflecting skepticism that the deal will pass muster with regulators.

But traders were pleased at the sight of Rockwell Collins' $6.4 billion acquisition of B/E Aerospace. Shares of B/E Aeropsace (BEAV) shot up more than 15% as Rockwell (COL) fell 6%

Other deals included TD Ameritrade's $4 billion acquisition of rival Scottrade.

Meanwhile, cell phone services provider T-Mobile (TMUS) raised its profit outlook after adding 2 million net new customers in the third quarter. The company beat S&P Global Market Intelligence expectations on earnings per share.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.