big rally on wall street Big rally on Wall StreetMajor gauges...

big rally on wall street Big rally on Wall Street
Major gauges surge as M&A news, earnings, tech sector strength give a big boost to stocks.
July 24 2006: 4:13 PM EDT


NEW YORK (CNNMoney.com) -- Stocks surged Monday, bouncing back after last week's sell-off, as investors eyed a pair of big deals and some upbeat earnings and decided to scoop up recently battered shares.

The Nasdaq composite (up 40.73 to 2,061.12, Charts) jumped 2 percent, according to early tallies. The tech-fueled index closed at a 14-month low Friday.



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The Dow industrials (up 179.62 to 11,048.00, Charts) rose around 1.7 percent, surpassing the 11,000 mark again. The broader Standard & Poor's 500 (up 20.44 to 1,260.73, Charts) index also added roughly 1.7 percent.

Treasury prices were little changed, and the dollar rose versus other major currencies.

Oil prices rose; the price of gold fell.

Here's a look at what was moving stocks near the close of trade.

Monday's market
Gains were broad based, with 29 out of 30 Dow components rising and 87 of the Nasdaq's 100 biggest stocks posting gains.

"The strength today is more than welcome, but the markets remain extremely volatile," said Ted Weisberg, a New York Stock Exchange floor trader at Seaport Securities.

Volatility has defined market action of late. Last Wednesday, the Dow surged 200 points after Federal Reserve Chairman Ben Bernanke seemed to imply that the central bank's interest-rate-hiking campaign was nearly over.

But stocks headed straight back down during the next two sessions, amid ongoing worries about corporate profits and the Mideast. Monday brought another big swing up.

Weisberg said that the market was likely to continue in a volatile mode for the time being.

"Because there is a certain lack of investor confidence, it doesn't take much to trigger a big move one way or the other," he added.

The absence of negative news and a lot of good domestic news all helped to spark the rally, said Barry Hyman, equity strategist at EKN Financial Services.

He said that there were also technical factors supporting gains on the Standard & Poor's 500 index, and that could help bring in more buyers over the short term.

However, worries about slowing economic growth and higher interest remain and are not likely to ease much until at least the next Federal Reserve policy meeting Aug. 8, he added.

"You get a little good news and the market will respond, but I wouldn't get aggressive yet, there's still a lot of confusion out there," Hyman said.

Oil prices turned around in the afternoon, rising on concerns about a hurricane heading toward the Gulf Coast and comments from U.S. officials casting doubt on the enforceability of any cease-fire in the Middle East.

U.S. light crude oil for September delivery rose 72 cents to $75.15 a barrel on the New York Mercantile Exchange.

What's moving?
HCA (up $1.44 to $49.31, Charts) agreed to a $21 billion leveraged buyout by a private equity group and members of the company's founding family and current management. That sent shares of the hospital owner up 3 percent Monday in active New York Stock Exchange trading.

Advanced Micro Devices said it would buy graphics chipmaker ATI Technologies for $5.4 billion. Shares of AMD (down $0.87 to $17.39, Charts) lost about 4 percent. ATI (up $3.02 to $19.58, Charts) shares rose 18 percent and topped the Nasdaq's most-active list.

Motorola (up $0.77 to $21.17, Charts) gained 3.7 percent after the company said it would buy back up to an additional $4.5 billion in shares.

Dell Computer (up $0.89 to $20.80, Charts) rose 3 percent after Citigroup upgraded it to "buy" from "hold," according to Reuters. The upgrade follows Dell's profit warning Friday, with Citigroup saying that any slowdown is already fully reflected in analysts' earnings estimates on Dell.

Investors also eyed a number of upbeat quarterly profit reports, including Dow component Merck (up $1.49 to $38.85, Charts). The drugmaker reported higher quarterly earnings that beat estimates and also boosted its outlook for the full year.

Fellow drugmaker Schering-Plough (up $1.22 to $20.67, Charts) also reported higher quarterly earnings that topped forecasts.

Rival Pfizer (up $0.93 to $24.76, Charts), a Dow component, gained as well.

Market breadth was positive. On the New York Stock Exchange, winners beat losers 4 to 1 on volume of almost 1.29 billion shares. On the Nasdaq, advancers beat decliners nearly 3 to 1 on volume of 1.63 billion shares.

Treasury prices slipped, with the yield on the benchmark 10-year note rising to 5.04 percent, from around 5.03 percent late Friday. Treasury prices and yields move in opposite directions.

The dollar gained versus other major currencies.

COMEX gold for August delivery fell $10.40 to $613 an ounce.

In global trade, Asian markets ended mixed, with the Japanese Nikkei lower. European markets mostly ended higher.

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