Stocks rebounded Monday after a fresh round of buyout news offered evidence that Wall Street’s penchant for dealmaking 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. said they agreed to merge. The combined company will have a market value of about $53 billion.

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 $93.2 billion to fight a rival bid.

The turnaround from Friday’s retrenchment demonstrates the market’s resiliency, but also raises questions of whether the short-lived nature of most of this year’s pullbacks means stocks are rising on a rickety foundation, said Ted Aronson, a partner at Aronson Johnson Ortiz in Philadelphia. Like many investors, he sees retreats as a healthful break for ascendent markets. (MORE)