NEW YORK

Stocks rebound over buyout, earnings news

NEW YORK — Stocks rebounded Monday after a fresh round of buyout news offered evidence that Wall Street's penchant for deal-making hasn't disappeared.

Better-than-expected profit news from Merck & Co. also boosted the mood on Wall Street, helping it partially recover from a steep sell-off Friday that was triggered by some weak earnings reports and worries about souring subprime loans.

The stock market pushed those concerns aside Monday after Transocean Inc., the world's largest offshore drilling contractor, and rival GlobalSantaFe Corp. agreed to merge.

In addition, equipment rental company United Rentals Inc. agreed to be taken private by affiliates of Cerberus Capital Management LP for about $4 billion in cash, while British bank Barclays PLC said it would raise its offer for ABN Amro Holding NV to $93.1 billion to fight a rival bid.

The turnaround from Friday demonstrates the market's resiliency, but also raises questions of whether the short-lived nature of most of this year's pullbacks means that stocks are rising on a rickety foundation, said Ted Aronson, a partner at Aronson Johnson Ortiz in Philadelphia.

The Dow Jones industrial average rose 92.34, or 0.67 percent, to 13,943.42. Broader stock indicators also advanced. The Standard & Poor's 500 index rose 7.46, or 0.49 percent, to 1,541.56. The Nasdaq composite index showed more modest gains, rising 2.98, or 0.11 percent, to 2,690.58.

Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.96 percent from 4.95 percent late Friday. The dollar was mixed against other major currencies after hitting a new record low against the euro and a new 26-year low against the British pound. Gold prices fell.

Light, sweet crude fell 90 cents to $74.89 per barrel on the New York Mercantile Exchange on suggestions that OPEC may increase its output.

Analysts see little impact on Epogen sales

NEW YORK — Shares of Thousand Oaks-based biotechnology company Amgen Inc. rose Monday after analysts said a new Medicare reimbursement policy will have little effect on sales of Amgen's anemia drug Epogen.

On Friday, the Centers for Medicare and Medicaid Services said it will reduce reimbursement for anemia drugs for some patients on dialysis.

Analysts said the agency is still recommending full reimbursement for patients the drug is designed to treat. The cuts will only affect patients who have been using the drug for more than three months and have less severe anemia.

Citigroup analyst Yaron Weber upgraded the stock to "Hold" from "Sell" on the news. He said he believes that the agency is no longer being pressured to reduce reimbursement for erythropoiesis-stimulating agents like Epogen and that the agency may cancel proposed cuts in cancer reimbursement.

Amgen shares gained 62 cents to close at $56.80 Monday.

Researchers report breaking into iPhone

NEW YORK — Hackers could take control of an iPhone if its owner visits a doctored Web site or Internet hotspot, security researchers reported Monday.

The vulnerability of the device, Apple Inc.'s first cell phone, is only theoretical for now. There are no reports of criminals actually taking advantage of the security glitch.

But if it were exploited, hijacked iPhones could be very useful to the same gangs that take over personal computers and use them to disseminate spam, said Charlie Miller, principal security analyst at Independent Security Evaluators, which discovered the flaw.

Hijacked iPhones could be used to send spam by text message, which computers generally can't. Personal data on the phones, such as phone numbers and text messages, would be accessible as well. The flaw applies not only to the iPhone, launched just three weeks ago, but also to Apple computers running Mac OS and the company's Safari Web browser, a version of which comes with the iPhone. It does not affect Safari running on Microsoft Corp.'s Windows systems.

Researchers at Baltimore-based ISE provided details to Apple and supplied the company with a software update for plugging the hole.

Washington, D.C.

Satellite radio firms to offer channel choice

Top executives at the nation's two satellite radio companies detailed pricing plans Monday that they said would let customers choose which channels they want to receive if the two firms are combined.

Sirius Satellite Radio Inc. announced in February that it would acquire XM Satellite Radio Holdings Inc. for $4.7 billion. The combination requires approval from antitrust regulators and the Federal Communications Commission.

The pricing plans range from $6.99 per month for 50 channels offered by one service to $16.99 per month where customers would keep their existing service, plus "choose from the best" of channels offered by the other service.

Currently, the price of a monthly subscription for both companies is $12.95 and there is no channel choice.

Texas

Transocean, GlobalSantaFe to combine

HOUSTON — The world's largest offshore drilling contractor got bigger with Monday's announcement by Transocean that it will combine with GlobalSantaFe, creating a company able to drill from shallow to ultra-deep waters.

The shares of both companies rose.

The deal, announced jointly by both Houston-based companies, includes a $15 billion cash payout to shareholders of Transocean Inc. and GlobalSantaFe Corp. Shareholders of both companies also will get shares in the new company, which will retain the Transocean name and trade on the New York Stock Exchange under Transocean's symbol "RIG."

Value of the new company will be about $53 billion, including debt. The $15 billion for the cash payout to shareholders will be funded through a bridge loan due one year after closing. The deal is expected to close by the end of 2007.

Netherlands

Barclays increases bid for ABN Amro

AMSTERDAM — Barclays will raise its offer for ABN Amro to $93.1 billion, with help from two Asian financial partners, in the face of a rival bid led by the Royal Bank of Scotland, the British bank said Monday.

Barclays' new offer, about two-thirds in shares and the rest in cash, comes to $49.32 per ABN Amro share, up from its earlier all-share bid worth $46.74. The bid still falls below the RBS-led consortium offer of $53.01 per share that values ABN at $97.8 billion. Either takeover would be the largest in the history of the financial industry.

ABN Amro said it had received Barclays' revised offer and "welcomes the opportunity for shareholders to consider two competing proposals on a level playing field."

The bank's management endorsed the earlier Barclays bid, and sold its U.S. arm LaSalle Bank Corp. of Chicago to Bank of America Corp. for $21 billion in what was seen as a poison pill measure to frustrate RBS, which also wanted LaSalle.

ABN shareholders objected to the sale that was never put up for a vote, but the Dutch Supreme Court approved the sale and it is expected to close before the end of the year.

— From wire reports