Deal stocks rise, emboldening bankers

Something unusual is happening this year when one company announces it is buying another. Shares of the acquirer are going up. Normal behavior is for the stock of the buyer to fall as traders skeptically value the short-term cost of the takeover as outweighing any future synergistic benefits.

But just over the last 10 days, shares of Pfizer, Expedia, J.M. Smucker, Rite Aid and Harris Corp. jumped after the announcement of a takeover.

There were $60 billion worth of global deals last week and another $26 billion this week.
And that's helped push the S&P 500 up 5 percent this month to near a record high.

The technology sector, playable through the SPDR Select Technology ETF, is far and away the epicenter of M&A this year with more than 700 deals taking place, according to Dealogic. The ETF is up 3 percent in 2015.
Health care, with 279 deals, and telecom, home of 76 M&A transactions, round out the top three of dealmaking sectors this year, according to Dealogic. Two ETFs that represent those sectors are the SPDR Health Care ETF and the iShares Telecommunications ETF. Both are up more than 3 percent this year.

he top advisor to deals globally so far this year is Goldman Sachs, leading 35 percent of the M&A transactions, according to Dealogic. JPMorgan is a close second, advising on a third of the deals, and Bank Of America Merrill Lynch is third, responsible for about a quarter of this year's matchmaking.

To be sure, some investors believed the fact that acquirers' shares are going up is just one more sign of the froth in this market and a top will soon come.