Stocks climb on banking reform, China growth - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Stocks climb on banking reform, China growth

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In this March 8, 2010 file photograph, a sign for Wall Street is shown near the New York Stock Exchange. (AP Photo/Mark Lennihan, file) In this March 8, 2010 file photograph, a sign for Wall Street is shown near the New York Stock Exchange. (AP Photo/Mark Lennihan, file)

NEW YORK (AP) — 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 75 points in morning 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 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 75.45, or 0.7 percent, to 10,538.22 in morning trading.

The Standard & Poor's 500 index rose 10.69, or 1 percent, to 1,120.24, while the Nasdaq composite index rose 25.77, or 1.2 percent, to 2,268.25.

More than seven stocks rose for every one that fell on the New York Stock Exchange, where volume came to 105.9 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.

Britain's FTSE 100 rose 1.1 percent, Germany's DAX index gained 1.1 percent, and France's CAC-40 rose 1.3 percent. Japan's Nikkei stock average climbed 0.9 percent.

Hewlett-Packard, which has been buying up smaller companies in recent months, will pay $1.5 billion, or $43.50 per share, in cash for ArcSight..

Hertz agreed to pay $1.43 billion, or $50 per share, for Dollar Thrifty, beating out competitor Avis Budget Group Inc. in a bidding war to acquire the rival rental car company.

Genzyme Corp. said it will sell its genetic testing business to Laboratory Corp. of America Holdings for $925 million. The sale comes after Genzyme rebuffed an $18.5 billion takeover bid from French pharmaceutical company Sanofi-Aventis.

Laboratory Corp. of America fell $1.78, or 2.3 percent, to $74.87. Genzyme fell 14 cents to $70.65. Sanofi-Aventis rose 54 cents to $31.52.

Dollar Thrifty rose $2.32, or 4.8 percent, to $50.33, while Hertz rose 91 cents, or 9 percent, to $10.96. Avis Budget rose 55 cents, or 5.5 percent, to $10.77.

ArcSight jumped $8.80, or 25.1 percent, to $43.90, while Hewlett-Packard fell 7 cents to $38.13.

Oil prices continued to rise as a leak in a pipeline that supplies oil to refineries in the Midwest remains closed. Benchmark crude rose $1.02 cents to $77.47 a barrel on the New York Mercantile Exchange.

Treasury prices traded in a narrow range. The yield on the 10-year Treasury note, which moves opposite its price, was unchanged at 2.79 percent compared with late Friday. Its yield is often used to help set interest rates on mortgages and other consumer loans.

Copyright 2010 The Associated Press.

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