Stocks rise to highest point since August

BY STAN CHOE

AND DAVID K. RANDALL

The Associated Press

Stock indexes closed Monday at the highest point since the U.S. debt limit showdown in August.

The market was driven higher by a round of big corporate takeovers and reports that Europe's bailout fund will be larger than originally thought. The Nasdaq composite index turned positive for the year.

Investors are still waiting for a resolution to Europe's debt problems. European leaders said they made progress at a weekend summit and plan to unveil concrete plans for containing the crisis by Wednesday.

The Dow climbed through the day after reports that Europe's takeover fund will be expanded. It ended up 104.83 points, or 0.89 percent, at 11,913.62.

"The market is expecting that there will be some kind of deal worked out Wednesday," when European financial ministers are next scheduled to meet, said Uri Landesman, president of Platinum Partners. "If there's not a deal by then, the market is going down significantly."

The Standard & Poor's 500 index rose 15.94 points, or 1.29 percent, to 1,254.19. That is just 3.45 points, or 0.3 percent, below where it started the year. It's the highest close for the S&P 500 since Aug. 3, just as Washington was resolving a showdown over raising the country's borrowing limit. If the S&P 500 finishes the year with a gain, it will be its biggest turnaround since 1984.

The Nasdaq composite rose 61.98, or 2.35 percent, to 2,699.44. The gains turned the Nasdaq positive for the year. The S&P 500 is the only major index still lower than where it started in 2011.

Major U.S. companies due to report earnings this week include UPS Inc., Ford Motor Co. and Procter & Gamble.

A series of corporate deals also helped lift the market, said Phil Orlando, chief equity strategist at Federated Investors.

Deals included: HealthSpring Inc., up 34 percent after Cigna Corp., up 1.4 percent, said it would buy the health insurer for $3.8 billion; RightNow Technologies Inc., up 19 percent after Oracle Corp., up 2.3 percent, said it would buy the tech service company for $1.5 billion; Mattel Inc., up 2 percent after it agreed to buy Hit Entertainment, a children's toy producer, for $680 million; and J.M. Smucker Co., up 0.7 percent after it bought most of Sara Lee Corp.'s North American food-service coffee operations for $350 million.