US STOCKS-M&A boosts Wall Street on deals from Xerox, Abbott

* Abbot to buy Solvay's drugs unit for $6.6 billion

* Xerox will acquire ACS for about $6.4 billion

* Dow index headed for best quarter since 1998

* For up-to-the-minute market news, click [STXNEWS/US] (Updates to morning trading)

By Rodrigo Campos

NEW YORK, Sept 28 (Reuters) - U.S. stocks jumped on Monday as more merger and acquisition activity in the last days of the third quarter encouraged investors following three sessions of losses.

Xerox Corp will buy Affiliated Computer Services Inc for $6.4 billion in a cash-and-stock deal that expands the copier company into technology outsourcing and data management. For details see [ID:nN2863430].

Xerox shares fell 13.4 percent to $7.77 while ACS shot up 16.7 percent to $55.06.

Abbott Laboratories said it would buy the drugs unit of Solvay in a $6.6 billion deal, giving Abbott full control of its Belgian development partner's cholesterol treatments and exposure to emerging markets. [ID:nLS426471].

Abbott stock rose 3.7 percent to $49.11.

"Deal announcements are helping the market off to a good start, especially as we had a bit of selling off last week," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

"People were waiting for a time to get in, and now, they have it."

With Monday's gains, the Dow Jones industrial average is up more than 15 percent for the quarter so far, which would make it its best such period since the fourth quarter of 1998.

A Jewish holiday observed Monday and the end of the third quarter two days later could translate into thin volume and volatility as fund managers reposition their assets amid fewer market participants, investors said.

The Dow Jones industrial average <.DJI> rose 118.28 points, or 1.22 percent, to 9,783.47. The Standard & Poor's 500 Index <.SPX> gained 14.76 points, or 1.41 percent, to 1,059.14. The Nasdaq Composite Index <.IXIC> jumped 35.48 points, or 1.70 percent, to 2,126.40.

GenTek Inc shares soared nearly 40 percent to $37.75 after the maker of specialty chemicals and vehicle engine components said it agreed to a takeover by a subsidiary of private equity firm American Securities LLC for $411 million in cash. [ID:nN2867763].

The Dutch biotechnology firm Crucell said Johnson & Johnson bought 14.6 million new Crucell shares for over $400 million as part of a flu vaccine development deal [ID:nLS661406].

China Unicom <0762.HK>, that country's No. 2 mobile carrier, said Apple Inc's popular iPhone would be sold in China starting in October at a retail price of about $730. [ID:nHKG249644]. France Telecom's Orange also said it would sell iPhones later this year.

Apple shares edged 1.3 percent higher.

The Federal Reserve Bank of Chicago said its National Activity Index was minus 0.90 in August, down from a revised minus 0.56 in July, but its three-month moving average of economic indicators improved for the seventh straight month to its highest level since June 2008. [ID:nNYS005442] (Additional reporting by Angela Moon; Editing by Padraic Cassidy)