U.S. stocks rally to new highs on deal making news

13:27, December 22, 2010      

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U.S. stocks carried its rising momentum to another day on deal making news and upbeat corporate earnings, pushing major indexes to a fresh two-year closing high.

The Dow Jones industrial average gained 55.03 points, or 0.48 percent, to 11,533.16, while the Standard &Poor's 500 index added 7.52 points, or 0.60 percent, to 1,254.60, the highest for both indexes since Lehman Brothers' collapse in September 2008.

The tech-heavy Nasdaq rose 18.05 points, or 0.68 percent, to 2, 667.61, the highest closing in three years.

Financials took the lead in all sectors as expectations rose that deal-making in the sector may continue next year after Toronto-Dominion Bank was reportedly buying Chrysler Financial, the automaker's old lending arm, from private equity firm Cerberus Capital Management LP for 6.3 billion U.S. dollars.

Bank of America gained 36 cents, or 2.85 percent, to 12.98 dollars per share, while J.P. Morgan Chase climbed 1.05, or 2.63 percent, to 41.00 dollars and American Express rose 73 cents, or 1. 72 percent, to 43.23 dollars, giving the blue-chip measure a big boost.

Investors largely shrugged off word that Fitch Ratings put Greece's ratings on review for a possible downgrade into junk territory and a warning by Moody's Investor Service that it may lower Portugal's A1 rating by one or two notches.

On the contrary, concerns over European debt crisis, which had been weighing on the market for a while, eased a little after Chinese vice Premier Wang Qishan said that China will take " concrete measures" to support the actions taken by the European Union and the International Monetary Fund to respond to the euro- zone debt crisis.

Upbeat earnings also helped push stocks higher. Software maker Adobe Systems Inc. rose about 5 percent as the company posted better-than-expected results and a brighter outlook.

Based on more signs of recovery, analysts were expecting that the final reading of GDP data would show a growth of 2.8 percent in the third quarter, up from an estimate of 2.5 percent last month.

Source: Xinhua
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