Stocks bounce higher as Kraft reaches Cadbury deal - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Stocks bounce higher as Kraft reaches Cadbury deal

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NEW YORK (AP) -- Investors moved back into stocks as Kraft Foods Inc.'s agreement to acquire Cadbury PLC stoked some optimism about the economy.

The market rose Monday as investors looked past a disappointing profit from Citigroup Inc. and bought health care stocks on hopes that a special election in Massachusetts will take away power from Senate Democrats and make it harder for President Barack Obama to make changes to health care.

The gains come after stocks fell Friday when JPMorgan Chase & Co.'s earnings fell short of expectations. The Dow Jones industrial average lost 100 points, its steepest slide of 2010. U.S. markets were closed Monday for Martin Luther King Jr. Day. The rebound came as Kraft sealed an agreement to acquire Cadbury for $18.9 billion. That boosted hopes that corporate dealmaking, which is a sign of confidence in the economy, will increase.

Meanwhile, online brokerage TD Ameritrade Holding Corp. said lower interest rates and higher expenses contributed to a 26 percent drop in its first-quarter profit.

Citigroup reported a fourth-quarter loss of $7.6 billion loss. The bulk of the loss is due to expenses related to its repayment of $20 billion in government bailout money.

But the report, like JPMorgan Chase's, reflected consumers' struggle to repay their loans. Citigroup set aside $8.18 billion to cover bad loans during the quarter.

In the first hour of trading, the Dow rose 36.58, or 0.3 percent, to $10.646.23. The broader Standard & Poor's 500 index rose 4.90, or 0.4 percent, to 1,140.93, and the Nasdaq composite index rose 15.40, or 0.7 percent, to 2,303.39.

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