US STOCKS-Wall St gains on merger activity; financials drag
(Updates to open)
* Forest Labs to buy Furiex for up to $1.46 bln
* Pfizer works on next move in takeover bid for Astrazeneca
* Obama announces new U.S. sanctions on Russia over Ukraine
* Indexes up: Dow 0.6 pct; S&P 0.3 pct; Nasdaq 0.2 pct
By Angela Moon
NEW YORK, April 28 (Reuters) - U.S. stocks rose on Monday, rebounding from the previous session's decline, amid a flurry of merger and acquisition activities in the pharmaceutical sector.
On the benchmark S&P index, financial stocks were the worst performers, with the sector down 0.5 percent. Bank of America shares were down 4 percent at $15.35 in early trading. JPMorgan Chase shares were down nearly 1 percent at $55.19 and Goldman Sachs fell 1 percent to $156.58.
Bank of America Corp said it would suspend a $4 billion stock buyback program and a planned increase in its quarterly dividend after it miscalculated the treatment of certain structured notes related to its acquisition of Merrill Lynch in 2009. The company also said it would resubmit its 2014 capital plan to the Federal Reserve.
Pharmaceuticals outperformed other sectors after U.S. drugmaker Pfizer Inc was said to be working on its next move in a potential $100 billion bid to take over Britain's AstraZeneca Plc, after two earlier bids were rejected.
Pfizer was the biggest gainer on the Dow Jones industrial average, up 3.6 percent at $31.87.
Separately, Forest Laboratories Inc said it would buy Furiex Pharmaceuticals Inc for up to $1.46 billion, including milestone payments to access Furiex's promising treatment for irritable bowel syndrome.
Furiex Pharmaceuticals shares jumped 28 percent to $102.55 while Forest Laboratories shares were up 0.3 percent at $90.08.
Adding optimism about the economy, data showed contracts to buy previously owned U.S. homes rose in March for the first time in nine months, in the latest sign that the housing market was stabilizing after a recent wobble.
"Clearly investors are shifting focus to the rich economic calendar we have this week and other events like the FOMC meeting and away from geopolitical concerns," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
U.S. President Barack Obama on Monday announced new sanctions against some Russians to stop President Vladimir Putin from fomenting a rebellion in eastern Ukraine, but said he was holding broader measures against Russia's economy "in reserve."
The Dow Jones industrial average rose 91.97 points, or 0.56 percent, to 16,453.43, the S&P 500 gained 5.53 points, or 0.3 percent, to 1,868.93 and the Nasdaq Composite added 8.743 points, or 0.21 percent, to 4,084.304.
On the Nasdaq, Amazon.com Inc was one of the biggest losers, extending Friday's sharp decline following its earnings statement. The stock was off 3.2 percent at $293.97. Netflix Inc was down 2.2 percent at $315.40.
Charter Communications Inc reported a 15 percent jump in first-quarter revenue due to a rise in the number of residential video subscribers. The stock rose 7.6 percent to $139.91. (Editing by Bernadette Baum)