Tech stocks lead US equities higher

Trader Michael Capolino, right, works on the floor of the New York Stock Exchange Monday, May 19, 2014. Tech stocks led US markets higher Monday helped by the truce in the smartphone patents battle between Apple and Google. AP PHOTO/RICHARD DREW

NEW YORK—Tech stocks led US markets higher Monday helped by the truce in the smartphone patents battle between Apple and Google.

The tech-rich Nasdaq Composite Index notched the day’s strongest gains, advancing 35.23 (0.86 percent) to 4,125.82.

The Dow Jones Industrial Average gained 20.55 (0.12 percent) to 16,511.86, while the broad-based S&P 500 rose 7.22 (0.38 percent) to 1,885.08.

Monday’s trade was the first since Apple and Google said late Friday evening they were dismissing law suits against each other and would work together on patent reform.

Apple rose 1.2 percent, while Google jumped 1.6 percent. Other Nasdaq stocks with big gains included Netflix (+4.2 percent), Priceline (+1.9 percent) and Zillow (+3.5 percent).

“Clearly Nasdaq is leading the charge today,” said Michael James, managing director of equity trading at Wedbush Securities.

The agreement between Apple and Google has “spilled out over the other tech stocks,” he said.

Peter Cardillo, chief market economist at Rockwell Global Capital, said stocks were “oversold” last week.

US telecommunications giant AT&T Sunday announced a deal to acquire broadcast satellite service provider DirecTV for nearly $50 billion, the latest in a string of pay TV consolidation moves.

AT&T shares fell 1.0 percent, while DirecTV declined 1.8 percent.

British pharma company AstraZeneca again rejected a sweetened takeover offer from US giant Pfizer, which called its $117 billion weekend bid its “final” offer for AstraZeneca.

Dow member Pfizer rose 0.6 percent, while US shares of AstraZeneca tumbled 12.0 percent.

Biotech company InterMune powered 13.4 percent higher on positive test results for pirfenidone, a treatment for idiopathic pulmonary fibrosis, a lung disease.

Time Warner rose 1.8 percent after its Warner Brothers division scored strong box-office grosses for a remake of “Godzilla,” which grossed $93.2 million in ticket sales over the weekend, compared to $26 million for second-place “Neighbors.”

Campbell Soup lowered its profit forecast following disappointing sales in a “challenging consumer environment.” Shares fell 2.4 percent.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.54 percent from 2.52 percent Friday, while the 30-year increased to 3.38 percent from 3.35 percent. Bond prices and yields move inversely.