U.S. MARKET AVERAGES

News of mergers, sustained personal spending, and drop in oil price contributed to the bullish sentiment at the opening. The rise in the American averages was followed by a averages rising across the globe.

Retail and tech stocks led rally advanced vast majority of tech and retailer stocks. The broad participation in the rally was driven by the morning’s release better than expected personal income and spending data from the Department of Commerce.

Deals between Novartis and Chiron and Placer Dome and Barrick Gold, has significantly lifted the market mood. The news on the earnings supported early buying. Kellogg reported 66 cents earnings for the quarter compared to 59 cents a year ago and Valero Energy reported $2.94 vs. $1.57 a year ago and the company said the earnings estimates of $3.67 per share for the current quarter is too low.

The firm rally in the tech stocks is led by rise of 3.9% or $13.97 in Google Inc. shares and 5.73% or $3.12 rise in Apple Computer, and rise of 2.65% or $1.52 in SanDisk. Wal-Mart raised its October same store guidance to 4.3% taking the stock higher by $1.81 to $47.31.

Shares of Casino, retailers, home builders are up significantly. Ten-year bond yields closed down to 4.57% from 4.59%.

MOVERS AND SHAKERS

Barrick Gold Corp. (ABX: chart) offered to acquire Canadian gold miner Placer Dome Inc. (PDG: chart). Barrick said it will pay up to $1.2 billion in cash and issue up to 303 million shares to purchase Placer Dome at $20.50 a share. This buyout price represents a premium of about 24%. Placer Dome stock soared more than 20%, while Barrick Gold stock lost 1.3%.

Swiss drug maker Novartis AG (NVS: chart) increased its offer for biotech company Chiron Corp. (CHIR: chart) from $4.5 billion to $5.1 billion, winning the support of Chiron''s board. Chiron stock jumped 2.3%. The Novartis offer is for 58% of Chiron shares it does not own.

ECONOMIC NEWS

The Department of Commerce released its report on personal income and spending in the month of September on Monday, showing an increase in income that exceeded economist estimates while spending growth came in line with expectations.

The report showed that personal income surged up by 1.7 percent in September following a downwardly revised 0.9 percent drop in August. Economists had expected income to increase by 0.3 percent compared to the 0.1 percent drop originally reported for August.

The increase in income reflected an influx of insurance payments stemming from the damage caused by Hurricanes Katrina and Rita. Additionally, the decline in rental income that contributed to the decrease in August slowed significantly.

The Commerce Dept. also said that personal spending rose by 0.5 percent in September, rebounding after falling by 0.5 percent in August. The personal spending growth came in line with economist estimates.

The report also showed that the consumer spending price index rose 0.2 percent in September after edging up 0.1 percent in each of the three previous months. Price growth remained at an annual rate of 2.0 percent, the upper end of the Federal Reserve''s comfort zone

The Commerce Department is scheduled to release personal income and consumption data at 8:30 a.m. Economists in a Reuters survey expect an average rise of 0.3% in income versus a 0.1% fall and a 0.5% increase in spending versus a 0.5% decrease in the prior month.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks registered solid gains Monday on strong Friday close of U.S. equity markets, boosted by GDP growth, and ahead of an interest-rate increase from the U.S. Fed Reserve. The Nikkei surged 2% on domestic earnings and export-related issues. Other regional markets rising above 1% were Australia’s All Ordinaries, up 1.7%, followed by South Korea’s Kospi, up 1.5%, and Hong Kong’s Hang Seng, up 1.2%.

European markets posted solid gains at mid-day dealings, reflecting sharply higher U.S. markets close Friday, lower oil prices, as well as a merger-and-acquisition news from Spanish Telefonica which agreed to buy U.K.’s mobile operator Q2 for $13.5 billion. The German DAX 30 added 2.14%, the French CAC 40 climbed 2.54%, and London’s FTSE rose 1.99%.

ENERGY, METALS, CURRENCIES

Crude oil declined below $61 a barrel after OPEC declared there was enough capacity and on expectations of lower U.S. fuel demand. Light sweet crude December contract fell 77 cents to $60.45 a barrel on the Nymex. Heating oil fell 2 cents to $1.8265 a gallon. Gasoline lost over 2 cents to $1.5975. Natural gas shed 26 cents to $12.79 per 1,000 cubic feet. London Brent lost 62 cents to $58.80