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U.S. stocks close up on bullish calls, CIT

NEW YORK, July 20 (UPI) -- U.S. stock indexes closed up Monday on earnings optimism, bullish analyst calls and news of a deal to keep lender CIT Group Inc. afloat.

The Dow Jones industrial average climbed 104.21 points, or 1.19 percent, to close at 8,848.15 in its sixth consecutive day of gains. The close also turned the Dow positive for the year.

The broader Standard & Poor's 500 Index rose 10.75 points, or 1.14 percent, at 951.13.

Goldman Sachs Group Inc. Monday raised its annual forecast for the S&P 500, saying an improvement in earnings would drive a sharp second-half rally. Goldman also raised its year-end S&P 500 target to 1,060, reflecting a potential price return of about 12 percent from Monday levels.

Volume on the New York Stock Exchange topped 4.9 billion shares traded.

The technology-heavy Nasdaq Composite Index added 22.68 points, or 1.2 percent, to 1,909.29.

In London, the benchmark FTSE 100 index 54.87 points, or 1.3 percent, to close at 4,443.62, its highest close since June 11. The DAX blue chip stock market index in Frankfurt rose 51.75 points, or 1.04 percent, at 5,030.15. The CAC-40 in France was 52.48 points, or 1.63 percent, higher at 3,270.94.

In Asia, Hong Kong's Hang Seng index closed up 696.71 points, or 3.7 percent, at 19,502.37, finishing at its highest level since September 2008. Japanese markets were closed for the Marine Day holiday, a day of gratitude for the oceans' blessings and to hope for maritime Japan's economic prosperity.

The 10-year U.S. Treasury note rose 12/32, yielding 3.61 percent, while the 30-year bond was up 14/32, yielding 4.515 percent.

The U.S. dollar declined against every major currency. It fell to 94.29 yen from 94.36 yen in New York late Friday. The euro, in U.S. dollars, rose to $1.4228 from $1.4099.

Report: U.S. banks misused TARP money

WASHINGTON, July 20 (UPI) -- Many U.S. banks that got federal bailout money misused it, a special inspector general overseeing the government's financial rescue program said Monday.

While most of the 360 banks surveyed said the Troubled Asset Relief Program money they got from Washington helped them make loans or avoid a drop in lending, 40 percent said they also used the money to shore up their capital to protect against losses, Neil Barofsky, the special inspector general, said in a report. However, TARP does not allow banks to recoup losses already incurred on troubled assets.

Some banks invested some of the cash, used it to pay off debts or buy other banks, Barofsky's report said, the Washington Post reported.

Barofsky, a former New York assistant U.S. attorney in a securities-fraud unit, said the Treasury should require banks to submit regular, detailed information about how they use the bailout money so that the public can see how their money is being spent.

But Herbert Allison, the assistant secretary of the Treasury who monitors TARP, said in a letter it was not possible to say exactly where TARP dollars have gone.

The Treasury Department does require 21 of the nation's largest banks to file public reports each month showing the dollar volume of their new lending.

Taxpayers have invested more than $200 billion in more than 600 banks under the program, which began in October.

Some banks have started to repay the aid even as others continue to apply for it, the Post said.

GM gets 3 final bids for Opel, Vauxhall

FRANKFURT, Germany, July 20 (UPI) -- General Motors Co. received three final offers for stakes in its core European brands Adam Opel GmbH and Vauxhall Motors Ltd., the U.S. automaker said Monday.

"The final bids will now be analyzed and compared by GM," the Detroit automaker said.

Those bids "as well as GM's preliminary findings will then be reviewed with the German and other impacted governments, the EU Commission and the Opel/Vauxhall Trust Board," GM said.

While GM did not name the bidders, a German government spokesman told reporters the government anticipated Canadian auto supplier Magna International Inc. of Aurora, Ontario, and Belgian investment group RHJ International SA of Brussels would submit final offers for the brands.

Ulrich Wilhelm said Berlin was not clear if China's government-owned Beijing Automotive Industry Holding Co. Ltd. would also submit a final bid, but The Wall Street Journal said Monday it did.

Magna and RHJ are the takeover front-runners, the Journal said, citing a person close to the deal.

GM Europe said Friday its parent has requested final offers for Opel of Russelsheim, Germany, and Vauxhall of Luton, England, by Monday's close of business.

It said it would share its preliminary findings on the final bids later in the week with Germany and other European governments set to provide billions of euros in loans and guarantees to assist the takeover process and help save European jobs, EUobserver reported.

Some 25,000 of GM's 54,500 European workers are based in Germany and 5,500 work for Vauxhall.

Poll: Less consumer spending 'new normal'

PRINCETON, N.J., July 20 (UPI) -- A third of U.S. consumers say their recently depressed spending habits will become a "new normal" in the years ahead, a Gallup Poll said Monday.

The 32 percent figure -- little changed from April when Gallup first asked the question -- suggests those U.S. consumers have not slowed their spending since spring but have not increased it either, Gallup said.

Neither Gallup survey sought to measure the amount of money respondents typically spend or have spent in the past.

Eight percent said their new normal would be spending more in the years ahead.

Those with lower incomes were slightly more likely than higher-income Americans to say their new normal pattern was spending more, but not by much, Gallup said.

Both surveys also found that about a quarter of respondents said they recently began increasing their savings and that this will become their normal pattern in the years ahead, Gallup said.

Between 10 percent and 13 percent said they were saving less and that this would be their new normal.

The July 10-12 telephone survey with 1,018 U.S. adults has a margin of error of plus or minus 3 percentage points.