Nets, Techs Pace Rally

A sharp drop in energy prices sent stocks surging Monday, and technology and Internet shares led the way higher.

Google and eBay both rose after announcing a multi-year partnership, and Amazon gained 3% on a $500 million buyback. Google also targeted Microsoft in a separate announcement.

Intel and Nvidia gained on upgrades from Friedman Billings Ramsey, and Rackable Systems climbed 8% on a WR Hambrecht upgrade.

InterVideo soared 32% on a buyout offer from Corel .

Avanex gained 15% after raising guidance.

The broader market got a boost from merger activity and falling energy prices after Tropical Storm Ernesto’s threat to Gulf of Mexico energy production appeared to lessen.

Despite light pre-Labor Day volume, it will be a busy week on the economic front, with Fed meeting minutes, a speech by Fed chairman Ben Bernanke, a second-quarter GDP revision, manufacturing and unemployment data all on the agenda.

The Nasdaq surged 20 to 2160, the S&P 500 rose 7 to 1302, and the Dow gained 67 to 11,352. Volume rose to 1.77 billion shares on the NYSE, and 1.4 billion on the Nasdaq. Advancers led 22-9 on the NYSE, and 19-10 on the Nasdaq. Upside volume was 70% on the NYSE, and 81% on the Nasdaq. New highs-new lows were 137-31 on the NYSE, and 70-47 on the Nasdaq.