subject: Monday Markets Firm as Tech Has a Bid [print this page] Stocks extended their rally into a third week Monday as investors sent bank stocks higher following new global regulatory requirements and China's economy continued its robust growth. A round of corporate dealmaking also gave a lift to stocks. Hewlett-Packard Co. said it will purchase security software provider ArcSight Inc. Dollar Thrifty Automotive Group Inc. said it accepted Hertz Global Holdings Inc.'s acquisition offer. Acquisitions are often a sign that companies are confident the economy is going to expand soon.
The Dow Jones industrial average rose nearly 70 points in midday trading. If it holds onto gains Monday, it would be the eighth time in nine days the index rose. Global regulators agreed to reforms that could help avoid another credit crisis that plagued financial markets worldwide in 2008 and early 2009. Banks will gradually have to increase their reserves to protect against potential losses.
"The agreement itself was a little lighter than expected," said Mitch Schlesinger, managing director at FBB Capital. But because reserve requirements will be rolled out slowly and not be quite as strong as expected, it reduces short-term worries that banks would have to further cut back on lending and raise new cash quickly to meet new standards, Schlesinger said. The new regulations have added to confidence in Europe's banks, which have been slower than their U.S. counterparts to bolster reserves. European markets rose sharply Monday. Confidence in European banks was shaken early last week as investors questioned whether they could absorb potential losses on risky government debt.
Fresh signs of strong economic expansion in China also added to market strength Monday. New economic reports showed growth in the world's second-largest economy continues to accelerate at a time when economists were expecting it to slow. Strong growth in China is considered vital to a global recovery because if demand remains high there, it will offset sluggish growth in the U.S. where economic expansion is not as strong.
The Dow rose 68.91, or 0.7 percent, to 10,531.68 in midday trading. The Standard & Poor's 500 index rose 11.29, or 1 percent, to 1,120.84, while the Nasdaq composite index rose 35.67, or 1.6 percent, to 2,278.15.
More than six stocks rose for every one that fell on the New York Stock Exchange, where volume came to 324.5 million shares. Trading volume picked up as traders return from summer vacations and recent holidays. Volume in recent weeks had been extremely light, even by summer standards.
