By Kristina Peterson
NEW YORK (MarketWatch) -- U.S. stocks rallied Monday, as bulls
made an early bid to extend the markets' three-week winning streak
to four, after the group in charge of dating the starts and ends of
economic downturns declared that the U.S. recession ended last
summer.
"It doesn't mean growth is robust, but it is growth," Paul
Nolte, managing director at Dearborn Partners, said of Monday's
declaration by the National Bureau of Economic Research that the
longest U.S. recession since World War II ended in June 2009.
Not far from session highs, the Dow Jones Industrial Average
(DJI) was recently up 137.44 points, or 1.3%, to 10,745.07.
All but one of the Dow's 30 components rose, including
International Business Machines Corp. (IBM), which was up 1.4%
after the company said it would buy business-software firm Netezza
Corp. (NZ) for $1.7 billion.
"Companies are flush with cash, and valuations are pretty cheap,
so I would think M&A is only going to accelerate for the next
six months," said Maris Ogg, president at Tower Bridge
Advisors.
The S&P 500 (SPX) gained 15.35 points, or 1.4%, to 1,140.94,
with energy leading late-afternoon gains among its 10 industry
groups.
The Nasdaq Composite Index (RIXF) advanced 31.98 points, or
1.4%, to 2,347.59.
Four stocks advanced for every one on the decline on the New
York Stock Exchange, where 530 million shares had been exchanged as
of 2:45 p.m. Eastern time.
The NBER report propelled the S&P 500 past levels not
breached since May, with investor sentiment already having been
bolstered when home builder Lennar Corp. (LEN) topped forecasts,
reporting a better-than-expected quarterly profit and a drop in
orders that proved less dreary than those experienced by others in
its industry.
"Buyers were able to take the S&P above 1,131 resistance. If
the S&P closes above 1,131, rally hats will be on," Elliot
Spar, market strategist at Stifel, Nicolaus & Co., wrote in a
note.
The National Association of Home Builders reported that its
monthly index of builder sentiment remained unchanged in September
at an 18-month low. Read more about home builders' sentiment.
In its report, the NBER cautioned that its finding did not
represent a forecast about the future, saying that if another
downturn occurs it would represent a separate recession -- a
scenario viewed as unlikely by most economists -- rather than the
much-discussed "double dip."
Investor sentiment has turned "more positive because the
economic news has been better than feared, so it's more a sigh of
relief," Ogg said of Wall Street's recent climb.