NEW YORK Although Larry Summers was often criticized as too close to Wall Street's biggest banks, it turns out investors were happy to see him go.
Stocks turned in a mostly positive performance Monday after Summers, who had been the leading candidate to replace Federal Reserve chairman Ben Bernanke, withdrew his name from consideration. Summers, a former Treasury secretary, was viewed as being more likely to rein in the government's massive stimulus program. The president is expected to nominate Ben Bernanke's successor as early as this month. The new front-runner is Janet Yellen, the Fed's vice chair.
Stocks were also helped by news that0.7 percent in August, the most in eight months.
The Dow Jones industrial average closed up 118 points, or 0.7 percent, to 15,497 in afternoon trading. The Standard & Poor's 500 index rose 9 points, or 0.6 percent, to 1,697. The Nasdaq composite fell four points, a fraction of a percent, to 3,717, pulled down by a loss in Apple, which continued to slide after investors were disappointed with the company's latest iPhone models introduced last week. Apple lost $14.78, or 3 percent, to $450.
Nine of 10 industry groups in the S&P 500 rose. Only technology stocks declined. The biggest gains were for materials stocks -- metal miners, fertilizer makers, and industrial gas companies.
At its highest point in late morning trading, the S&P 500 was within five points of its previous record close of 1,709.67, set on Aug. 2.
That worried Brad McMillan, chief investment officer for Commonwealth Financial.
McMillan said there are risks that investors don't seem to be accounting for in the prices they're paying. The Syria situation might not be resolved as easily as some are assuming. Europe's debt crisis isn't over. Investors seem to believe corporate profits will keep growing as fast as they have been, even though cheap debt refinancing has driven much of that growth. And there's another debate upcoming in Washington about the U.S. debt ceiling. "The last time we had a real problem with it, it did result in a significant market correction," McMillan said.
Linda Duessel, market strategist at Federated Investors in Pittsburgh, said it's just as likely that some of those issues will turn out in ways that don't hurt stocks. And even if one of those issues causes stocks to decline, "that could be the correction that any us of who have cash on the sidelines are waiting for," she said.
Bond prices rose, pushing yields lower. The yield on the 10-year Treasury note fell to 2.87 percent from 2.88 percent late Friday. The dollar fell against the yen and the euro.
Trading in stock options was halted for less than an hour Monday afternoon because of a problem with their price-reporting system.
Summers' withdrawal helped stocks overseas, too. The FTSE 100 index of leading British shares was up 0.6 percent. Germany's DAX rose 1.2 percent, and the CAC-40 in France was 0.9 percent higher.
Oil traders were monitoring Syria developments. The recent diplomatic drive, which has seen the prospect decrease of a U.S.-led attack on Syria dissipate, has pushed oil prices back down. The benchmark New York price of crude fell $1.62 to $106.59 a barrel.