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Dow closes above 11,000 for first time since ’08

The Dow Jones industrial average has closed above 11,000 for the first time in a year and a half on investors' rising hopes about the economy.
/ Source: The Associated Press

The Dow Jones industrial average has closed above 11,000 for the first time in a year and a half on investors' rising hopes about the economy.

The Dow edged up about 9 points Monday to almost 11,006. The Standard & Poor's 500 index came within a point of hitting its own milestone of 1,200 during trading but closed just short of that mark.

A loan agreement for Greece allowed U.S. investors to focus on domestic economic and corporate news, including announcements of two big deals.

European leaders agreed over the weekend to make loans available to Greece to help the country lower its public debt burden. The 16 countries that use the euro agreed to provide $40.5 billion in loans to Greece if needed. The International Monetary Fund could contribute another $13.5 billion.

The details helped to ease worries that have been one of the few drags on stocks so far this year. There has been concerns in recent months that mounting debt in Greece and other European nations like Spain and Portugal would stunt an economic recovery in Europe and undermine Europe's shared currency, the euro.

"This is clearly a positive development that the EU is identifying and dealing with what has really been it's first real challenge," said Alan Gayle, senior investment strategist for RidgeWorth Investments.

Meanwhile, the latest round of corporate dealmaking signaled that business leaders are more confident about a recovery.

Mirant Corp. agreed to acquire rival power company RRI Energy Inc. for $1.61 billion, while the private equity firm Cerberus Capital Management is buying DynCorp International, a provider of support services to U.S. national security operations, for $1 billion.

The reports on Greece and the corporate buyouts raised expectations that the economy is recovering. Hopes of a rebound have been driving the stock market higher for 13 months. The advance since February has been more incremental but the gains have still left major stock indexes at their best levels in about 18 months.

The Dow rose 8.62, or 0.1 percent, to 11,005.97. It was the Dow's first close above 11,000 since Sept. 26, 2008. The index climbed above 11,000 in the final moments of trading Friday before fading below the threshold.

The Dow has posted six straight weekly advances, its longest winning streak in a year. The index has added 1,000 points in two months. The index's only close below 10,000 this year came on Feb. 8. Since then, it's up 11 percent.

It has risen 68.1 percent since hitting a 12-year low in March last year though it is still down 22.3 percent from its peak or 14,164.53 in October 2007.

In other trading, the S&P 500 index rose 2.11, or 0.2 percent, to 1,196.48. It traded has high as 1,199.20. It hasn't topped 1,200 since September 2008.

The Nasdaq composite index rose 3.82, or 0.2 percent, to 2,457.87.

Bond prices rose on caution ahead of the week's earnings reports. The rise in prices pushed down yields. The yield on the benchmark 10-year Treasury note fell to 3.84 percent from 3.88 percent late Friday.

Reports on inflation, retail sales, manufacturing and housing will be released during the week. Intel Corp., JPMorgan Chase & Co., Bank of America Corp., Google Inc. and General Electric Co. all slated to report earnings this week.

Among stocks, Mirant rose $1.95, or 18.2 percent, to $12.68, while RRI rose 58 cents, or 14.7 percent, to $4.53. DynCorp surged $5.66, or 48.2 percent, to $17.41.

Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 974.9 million shares, compared with 1 billion Friday.

The Russell 2000 index of smaller companies rose 2.11, or 0.3 percent, to 705.06.