US stock indexes jump following big gains in Europe

NEW YORK (AP) — U.S. stocks are jumping Monday morning as the market rapidly changes course once again.

Technology companies are climbing, with open-source software company Red Hat surging after IBM agreed to buy it for $34 billion in stock.

Companies that make and sell consumer goods are rising. Automakers are rallying following a report that China could cut its import tax on autos. Internet and media companies are rising as well.

Stocks in Europe also turned sharply higher. Italy’s main stock index rallied after Standard & Poor’s did not lower the country’s credit rating.

German stocks rose even though longtime German Chancellor Angela Merkel said she won’t run for another term in 2021. The Bovespa index in Brazil climbed after far-right politician Jair Bolsonaro was elected president.

KEEPING SCORE:

The S&P 500 index climbed 36 points, or 1.4 percent, to 2,695 as of 10:45 a.m. Eastern time. The Dow Jones Industrial Average rose 240 points, or 1 percent, to 24,929.

The Nasdaq composite gained 85 points, or 1.2 percent, to 7,252. The Russell 2000 index of smaller-company stocks added 27 points, or 1.8 percent, to 1,511.

Stocks have plunged since early October and trading has been especially volatile the last few days. The S&P 500 staged a big rally Thursday, and then gave up virtually all of those gains Friday before climbing Monday. The S&P 500 is down 7.5 percent this month, which would be its worst monthly loss since May 2010.

DO YOU LIKE MY HAT?

IBM said the purchase of Red Hat will help the company take the next step in cloud computing. Chairman and CEO Ginni Rometty said the deal will make IBM the world’s biggest hybrid cloud provider, meaning it will offer companies a mix of on-site, private and third-party public cloud services. Red Hat stock soared 47.6 percent to $172.17, reversing its losses from earlier this year. IBM fell 2.6 percent to $121.60.

CHANGING GEARS:

Bloomberg News reported that regulators in China intend to propose cutting the tax on imported cars to 5 percent from 10 percent. The trade fight between the U.S. and China has hurt sales, and that slowdown is one of several factors that have damaged car company stocks this year.

General Motors jumped 4.3 percent to $34.07 and Ford climbed 5.7 percent to $9.49. Auto parts companies also rallied. BorgWarner jumped 7.1 percent to $40.74. After Cooper Tire & Rubber reported a bigger third-quarter profit than analysts expected, its stock surged 16.8 percent to $29.73 and Goodyear gained 6.4 percent to $21.65.