Stocks wipe out losses, S&P 500 closes just shy of record high

NEW YORK, Feb. 24 (UPI) -- The stock market rallied Monday to wipe out nearly all of its early-year losses, with the S&P 500 closing just shy of the historic high it reached last month.

Economic news coming out of Europe, where an upbeat German confidence report pleased investors and the latest spree of M&A action took the S&P to the brink of an historic high, closing 11.36 higher, or 0.6 percent to 1,847.61, just shy of its Jan. 15 record close of 1,848.38.

“You had a pretty positive number out of Germany,” said Quincy Krosby, market strategist at Prudential Financial.

Financial assistance to Ukraine, which has been undergoing major civil strife, also brought cheer to the markets. The Dow Jones Industrial Average DJIA +0.65 percent gained 105.83 points, or 0.7 percent, to end at 16,209.13 and the Nasdaq added 29.56 points, or 0.7 percent, to close at 4,292.97.

Markets were on a downturn early this year, after below-par economic data was blamed on the cold weather, a lack of confidence in emerging markets and the political turmoil in Ukraine. But the upswing seems to have coincided with Fed Chief Janet Yellen's first testimony before Congress and a general confidence that the fundamentals were in place to drive better U.S. economic growth.

But David Kelly, chief global strategist at J.P. Morgan Funds, warns that this optimism needs to be followed up with better economic data come spring.

"The numbers need to pick up over the next few weeks or investors will begin to recalibrate their views of the year ahead into a picture of lower readings on inflation, earnings, interest rates and stock prices," Kelly said.

Some of the prominent gainers were Facebook, buoyed by its latest acquisition, Tesla and Google. An early announcement of a new offer by Men's Wearhouse to purchase Jos. A. Bank helped toward today's gains. Other M&A deals, such as Comcast's purchase of Time Warner Cable and Actavis PLC’s agreement to buy Forest Laboratories Inc have helped during the rally.

[MarketWatch] [USAToday]