AIG Deal, Greece Optimism Boost Wall St.
Major stock indexes rose to their highest levels in more than a month Monday after corporate buyouts raised hopes about the economy.
The Dow Jones industrial average rose 79 points. The Standard & Poor's 500 index, the basis of many mutual funds, erased its losses for the year. The Nasdaq composite index also turned positive for 2010 after a Japanese drugmaker said it was pursuing OSI Pharmaceuticals Inc. and SanDisk Corp. raised its revenue forecast.
The biggest boost for the market came from insurer American International Group Inc., which agreed to sell its prized Asian life insurance business to Britain's Prudential PLC for $35.5 billion. It's seen as a sign of confidence in the economy when big businesses go ahead with takeovers.
AIG wants to sell the division, known as AIA Group, as part of its plan to streamline operations and repay the government. AIG had taken $129.3 billion in government aid by the end of last year.
Stocks also rose on hope that European nations will announce a bailout deal to help Greece with its mounting debt problems. Stocks around the world have been hurt in recent months because of concerns debt problems in Greece would spread to other countries and undermine Europe's shared currency, the euro.
European Union and Greek officials are meeting and media reports said a deal could be hammered out soon that would involve state-owned banks in Europe buying Greek government bonds.
The corporate takeovers and the possibility of some fix for Greece's problems bolstered a sense that the economy could continue to rebound. Major stock market indexes rose more than 2 percent in February for their best performance since November. Stocks have jumped in the past 12 months but investors have still been concerned that a rebound in the economy will stall.
Dave Hinnenkamp, chief executive KDV Wealth Management in Minneapolis, said the deals signal that companies are becoming more confident in the economic recovery and willing to spend some of their cash.
"They are at a point now where they can see that the light at the end of the tunnel isn't a train," Hinnenkamp said.
According to preliminary calculations, the Dow rose 78.53, or 0.8 percent, to 10,403.79, its highest close since Jan. 20.
The broader S&P 500 index rose 11.22, or 1 percent, to 1,115.71. It is now up 0.1 percent for 2010. The Nasdaq rose 35.31, or 1.6 percent, to 2,273.57. It's up 0.2 percent for the year.