Stocks rose on Monday, but were off session highs, after CIT Group Inc clinched a deal with bondholders that removed some uncertainty from a recovering financial sector.
Adding to the positive tone, a forward-looking gauge of the overall strength of the U.S. economy rose for the third consecutive month in June, suggesting the end is near for the 19-month-long recession.
Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois, said the market was advancing on relief over the expected deal that would prevent CIT to sink.
The Dow Jones industrial average <.DJI> gained 23.65 points, or 0.27 percent, to 8,767.59. The Standard & Poor's 500 Index <.SPX> added 1.31 points, or 0.14 percent, to 941.69. The Nasdaq Composite Index <.IXIC> was up 4.24 points, or 0.22 percent, to 1,890.85.
The broad S&P 500 index has jumped almost 40 percent from 12-year lows in March. The rally stalled in June as investors sought evidence of the economic recovery, but recent data and corporate quarterly results gave the market a fresh lift and stocks closed their best week in four months last Friday.
Despite warning there is still a significant risk of a double-dip recession, Goldman Sachs raised its year-end target for the S&P 500 to 1,060 from 940 -- a rise of almost 13 percent from current levels.
In company news, shares of machinery maker Caterpillar Inc
Big companies due to report quarterly scorecards on Monday include Texas Instruments Inc
(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)