U.S. stocks gained on Monday on relief that Abu Dhabi's $10 billion aid would help neighboring Dubai avoid default, and a takeover deal by oil and gas giant Exxon Mobil Corp fed optimism about the growth of mergers and acquisitions.
A deal by Citigroup Inc to back U.S. government funds also helped stocks move higher.
Abu Dhabi said on Monday it will provide Dubai $10 billion in bailout money, $4.1 billion of which is for payment on a maturing bond.
We've tied up a few lose ends here ... Looks like Dubai got tied up pretty well, looks like M&A is back with Exxon, and it sends a message of valuation that companies are still cheap and that we have not gone too far too fast, said Burt White, chief investment officer at LPL Financial in Boston. It's a signal to investors we still have room to extend this rally,
The Dow Jones industrial average <.DJI> was up 27.81 points, or 0.27 percent, at 10,499.31. The Standard & Poor's 500 Index <.SPX> was up 6.36 points, or 0.57 percent, at 1,112.77. The Nasdaq Composite Index <.IXIC> was up 14.23 points, or 0.65 percent, at 2,204.54.
Citi shares fell 4.6 percent to $3.77.
Citi's stock is trading down because of dilution, but (the deal) is good in terms of getting the government out from underneath them and having the banks prove they don't need government in the system, said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.
Shares of XTO jumped 15.6 percent to $47.97 and Exxon Mobil fell 3.9 percent to $69.94. The First Trust ISE-Revere Natural Gas Index Fund
Sun Microsystems Inc
Britain's Cadbury Plc
The White House said U.S. President Barack Obama will make a statement on the economy after a meeting with the heads of the top U.S. banks scheduled for Monday morning.
(Editing by Padraic Cassidy)