Stocks Climb Back to Their Pre-Lehman Disaster Level
Stocks closed broadly higher Tuesday, helped by more deal activity in the financial sector and some upbeat earnings reports from the technology sector. After more than two years, the market has regained all its losses following the implosion of Lehman Brothers. The S&P 500 ($INX) now sits at a level not seen since early September 2008.
The Dow Jones Industrial Average ($INDU) rose 55 points, or 0.6%, to close at 11,533. Among the blue-chip index's leaders Tuesday were financial stocks Bank of America (BAC) and JPMorgan Chase (JPM), both of which rose more than 2.5%
The tech-heavy Nasdaq Composite ($COMPX) added 18 points, or 0.7%, to finish at 2,668. Tech stocks were buoyed by beat-and-raise earnings reports from both Adobe Systems (ADBE) and Jabil Circuit (JBL).
The S&P 500 gained 8 points, or 0.6%, to close at 1,255. That broad measure of U.S. equity performance has now reclaimed its losses following the crisis touched off when Lehman filed for Chapter 11 bankruptcy protection on Sept. 15, 2008 (see chart).
Traders love mergers and acquisitions because these deals show that companies have faith in the recovery, and on Tuesday they got their second big cross-border bank tie-up in less than a week. Canada's Toronto-Dominion Bank said it's buying Chrysler Financial, the automaker's former lending business, from private equity firm Cerberus for $6.3 billion. That deal follows last week's announcement that Canada's Bank of Montreal would buy U.S. bank Marshall & IIsley for $4.1 billion.
Predictably, bank stocks were big winners Tuesday, with S&P's financial sector gaining 1.6%. Basic materials were also strong after Chinese Vice Premier Wang Qishan said his country supports Europe's response to its debt crisis.
The bond market was essentially unchanged Tuesday, as the yield on the benchmark 10-Year Treasury closed at 3.3%. Gold on the Comex division of the New York Mercantile Exchange (CME) rose $2 to $1,388 an ounce. Oil inched up 46 cents to $89.83 a barrel.
