Stocks gained more than 1 percent on Monday, buoyed by healthcare shares, after a Senate bill advanced which had been stripped of provisions seen as detrimental to health insurance and other companies.
Stocks also got a lift after brokerages upgraded two Dow components.
Legislation to overhaul the U.S. healthcare system passed a crucial test early Monday as backers cleared a procedural hurdle to approving President Barack Obama's top legislative priority.
Following the vote, the Morgan Stanley Health Payor index <.HMO> climbed 3.8 percent while insurer Aetna Inc
This is a relief rally, since some of the most onerous provisions in the bill, such as a possible tax on pharmacy benefit mangers, turned out not to have materialized, said Craig Peckham, equity trading strategist at Jefferies & Company in New York.
Also, while the bill passed the Senate, the market knows it'll be an uphill battle to reconcile the Senate and House versions.
The Dow Jones industrial average <.DJI> gained 111.55 points, or 1.08 percent, to 10,439.69. The Standard & Poor's 500 Index <.SPX> rose 13.04 points, or 1.18 percent, to 1,115.42. The Nasdaq Composite Index <.IXIC> jumped 25.47 points, or 1.15 percent, to 2,237.14.
Aluminum company Alcoa Inc
Barclays upgraded Intel Corp
The S&P consumer discretionary sector <.GSPD> rose 1.2 percent following the last weekend before the Christmas holiday despite a major snow storm in the Eastern United States, which caused some shoppers stay in.
Several acquisition deals were announced on Monday, with Sanofi-Aventis
In addition, Bucyrus
Bucyrus shares climbed 9.7 percent to $55.77 while Terex was up 5.1 percent to $20.18 and TreeHouse surged 16 percent to $38.85.
(Editing by Kenneth Barry)