Stocks on major U.S. indices opened higher as takeovers and faster-than-estimated growth in retail sales fueled optimism in the economy.
The S&P 500 Index gained 1.87 points, or 0.16 percent, to trade at 1,201.08 at 10.08 a.m. EDT. The Dow Jones Industrial Average rose 33.98 points, or 0.30 percent, to trade at 11,226.56. The Nasdaq Composite Index increased 0.31 percent to trade at 2,526.08.
U.S. retail and food services sales rose more than expected for the fourth consecutive month in October mainly spurred by a rise in auto and other motor vehicle dealer sales, the U.S. Commerce Department reported.
U.S. retail and food services sales rose 1.2 percent to $373.1 billion from the previous month. It was up 7.3 percent from a year ago. Economists polled by Reuters were expecting a rise of 0.7 percent for the month. Excluding autos, sales rose 0.4 percent.
Alcoa (AA) led 1.2 percent increase in the Dow Jones Industrial Average, while Johnson & Johnson (JNJ) rose 1.1 percent.
Bucyrus International Inc. (BUCY) surged 29.24 percent to $89.98, after Caterpillar Inc. (CAT) agreed to buy the company for about $8.6 billion including net debt. Isilon Systems Inc. (ISLN) soared 28.60 percent to $33.81, after EMC Corp. (EMC) agreed to buy the maker of computer hardware.
Tiffany & Co. (TIF) and Bebe Stores Inc. (BEBE) advanced after the government reported the biggest increase in retail sales in seven months.
On Friday, stocks fell on fears of monetary tightening in China and Ireland's dubious debt position. For the week, the Dow industrials and S&P 500 lost 2.1 percent while the Nasdaq lost 2.35 percent.
Meanwhile, the Federal Reserve's latest attempt to boost the U.S. economy is coming under fire from Republican economists and politicians, threatening to push the central bank deeper into partisan politics.
A group of prominent Republican-leaning economists, coordinating with Republican lawmakers and political strategists, is launching a campaign this week calling on Fed Chairman Ben Bernanke to drop his plan to buy $600 billion in additional U.S. Treasury bonds.
Germany is pressing Ireland to seek aid before tomorrow’s meeting of European finance ministers to calm market volatility and win agreement on making investors help pay for future bailouts, Bloomberg reported, citing a German government official.
The euro declined 0.45 percent to 1.3630 against the dollar and the British pound fell 0.14 percent to 1.6092 against the dollar. Yen advanced 0.40 percent to 82.8550 against the dollar.
Crude oil futures advanced 0.62 percent to $85.41/barrel and gold futures rose by 0.34 percent.
European stock markets are currently trading higher with U.K. FTSE 100 up by 32.50 points, German DAX30 rose by 65.09 points and French CAC 40 gaining 28.86 points, while Spain IBEX 35 index surged 142.50 points.
However, stocks in Asia closed higher on Monday, with Tokyo's Nikkei index up by 1.1 percent to 9,827.51 points at the close of trading. Japan's economy grew more than expected at 0.9 percent in the July-to-September quarter.