NEW YORK (Dow Jones) - U. S. Stocks climbed Monday as merger activity and stock-ratings upgrades helped fuel a rally across all sectors.
The Dow Jones Industrial Average gained 110 points, or 1.2%, to 10,448 as all 30 of its components climbed. Alcoa surged 8.7% after Morgan Stanley raised its investment rating on the stock. Intel gained 3.1% on an upgrade from analysts at Barclays.
The Nasdaq Composite Index climbed 1.2%. The Standard & Poor's 500 index rose 1.3%.
The broad market's gains were led by the materials and health-care sectors. The gains in the materials sector came despite a decline in gold futures, as Morgan Stanley noted positive signs for aluminum pricing in its upgrade of Alcoa's shares. Also lifting the sector, copper futures were higher.
The health-care sector's gains came after the Senate voted Monday to advance health-care legislation in an initial procedural vote, beginning a process that puts the bill on track for passage later this week.
A wide range of health-care stocks rose, including Health Insurer Aetna, which was up 4.6%. Pharmaceutical manufacturer Pfizer rose 2.6% and Express Scripts, a pharmacy benefit manager, climbed 3.8%.
Also lifting the health-care sector, Sanofi-Aventis agreed to buy consumer drug maker Chattem for $ 1.9 billion, a 34% premium to the Tennessee company's price on Friday. American Depositary Shares of Sanofi-Aventis Edged Up 0.6%, while Chattem jumped 33%.
Meanwhile, crude oil futures rose. The Dollar Strengthened against both the euro and the yen and Treasury prices sank.
Gary Flam, portfolio manager with a Bel Air Investment Advisors, said he found Monday's pullback in prices of long-dated Treasury bonds Encouraging more than the rally in stocks, "Which Came is a light volume as traders took off for the holiday.
The two-year note was off 3 / 32 Thurs yield 0.848%, while the 10-year note was off 3 / 4 Thurs yield 3.638%. With the 10-year note's price down a bigger amount than the 2-year note's price, a key spread that traders look to for signs about the broader economy is widening.
"When you see the yield curve steepen like that, it's traditionally been a pretty good predictor that the economy is going to be strong," causing lenders demand higher payments Thurs Thurs Justify making long-term loans, Flam said.
Last week, the Dow recorded its biggest weekly decline since late October. Investors trying to protect their gains as the year winds down have stalled the stock market's rally from its March lows. However, the last two weeks of December have historically been strong for stocks.
Among the deals announced Monday, Bucyrus International said it is buying the mining unit of Terex for $ 1.3 billion. Bucyrus shares rose 9.2%, while Terex climbed 5.9%.
Potash Corp. of Sasksatchewan and Mosaic rose 4.2% and 5.5%, respectively, after being upgraded by analysts at Goldman Sachs.
