Stocks rose Monday after the death of Osama bin Laden, several strong earnings reports and a big acquisition in the drug industry. Bond prices fell and the dollar further weakened as investors put money into riskier investments as their confidence in the overall economy continued to improve.
President Barack Obama said late Sunday that bin Laden, the al-Qaida chief who masterminded the Sept. 11, 2001 attacks, had been killed by American forces in Pakistan.
"It's a win for the United States," said Oliver Pursche, president of Gary Goldberg Financial Services, who said the death had led to "exuberance" among investors.
But Pursche cautioned that the news would likely result in only a short-term gain for the market. Most traders, he said, will remain focused on earnings and economic news.
Dish Network Corp., Chrysler Group LLC and Humana Inc. all reported strong earnings. Dish Network's first-quarter net income more than doubled, in part, because of a patent settlement with TiVo Inc. Its stock rose 3 percent.
Humana's profit rose 22 percent. The company benefited as more people enrolled in its Medicare plans. Its stock was flat.
Chrysler turned its first profit since leaving bankruptcy two years ago thanks to growing sales.
The Dow Jones Industrial Average rose 44 points, or 0.3 percent, to 12,854.
The Standard & Poor's 500 index rose 5, or 0.4 percent, to 1,369. The Nasdaq composite index rose 8, or 0.3 percent, to 2,882.
Phil Dow, director of equity strategy at RBC Wealth Management, called the gains a "relief rally" following bin Laden's death.
In corporate news, Israeli drug maker Teva Pharmaceutical Industries Ltd. said it would buy Cephalon Inc. for $81.50 per share, or $6.8 billion. Cephalon's shares rose 6 percent. The deal comes about a month after Cephalon rejected a $73-per-share takeover bid from Valeant Pharmaceuticals Inc.
Bond prices fell, sending yields higher. The yield on the 10-year Treasury note rose to 3.31 percent from 3.29 percent late Friday. The dollar fell 0.2 percent against an index of six other heavily traded currencies.
The Institute of Supply Management reported that manufacturing activity increased for the 21st month in April, though at a slightly slower pace than the month before. This was expected by economists. The Commerce Department also reported that builders started work on more projects in March after three straight monthly declines in construction spending.
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