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Dow Adds 90; Madoff Gets 150

Elizabeth Trotta

The major indices in New York closed up more than 1% Monday, as investors shrugged off Bernie Madoff's 150-year prison sentence and prepped for the end of the second quarter amid surging energy prices.

The Dow Jones Industrial Average was up 90.99 points, or 1.1%, at 8529.38, while the S&P 500 rose 8.33 points, or 0.9%, to 927.23. TheNasdaq Composite gained 5.84 points, or 0.3%, to 1844.06.

Hewlett Packard(HPQ Quote) was the strongest performer on the Dow, gaining 3.6% to $38.98. Alcoa was the worst, losing 3% to $10.44, one of only three stocks on the blue chip index in negative territory.

The KBW Bank index rose 1.6%, the S&P Homebuilders Select Industry Index tacked on 1.4%, and the NYSE Energy Sector Index gained 1.4%.

Bernie Madoff, whose multibillion-dollar Ponzi scheme came to light six months ago, dominated Monday's headlines. He received 150 years of incarceration for his crimes, the maximum sentence. The news came after Madoff's attorney argued that 12 years was sufficient and Madoff told the judge he'd "made a terrible mistake."

Although the media is understandably focused on Madoff, the market has its eye on the end of the quarter, says Anu Sharma, managing director of the Market Intelligence Desk at Nasdaq OMX. Portfolio managers are making adjustments -- or window dressing, as it's sometimes called -- before the official end of the quarter Tuesday. Thus, investors are likely to see people move out of weaker names and into stronger ones, Sharma says.

AUDIO: Listen to Elizabeth Trotta discuss the market action with Anu Sharma.

"When you look at the sectors that are doing well, it also looks like after taking a break last week, you have the global economic recovery trade coming back on again," says Bill Stone, chief investment strategist at PNC Wealth Management. "That could also be in part due to window dressing, because those were the areas that were working. But at least for the moment, the market is expecting better economic growth."

Energy stocks were among those standing out, as oil surged $2.33 to $71.49. Those gains came as an OPEC governor said that both the EU and the cartel agreed that $70 to $80 a barrel is a reasonable price for crude oil under present circumstances. An attack by Nigerian militants shut a field operated by Royal Dutch Shell Plc, which has effectively halted output from Africa's largest producer and potentially adds to reductions in already-downscaled supply.

Among integrated oil stocks, PetroChina (PTR Quote) advanced 2.7%, Conoco Phillips (COP Quote) added 1.4%, and BP (BP Quote) climbed 1.5%.

The new week holds a good amount of economic data, although none is scheduled for Monday. Housing data for May in addition to nonfarm payrolls and unemployment figures for June will be among the most closely watched data later in the week.

In other news, Wendy's/Arby's Group (WEN Quote) gained 10.5% to $4.01 after Barron's wrote that the stock is appetizing despite a decline in confidence following a recent bond offering.

Elsewhere, investors had a smattering of deals to consider. Among them, Microsoft (MSFT Quote) is reportedly looking to free itself of Internet ad agency Razorfish, the Financial Times reports. The software company has hired Morgan Stanley (MS Quote) to help it find a buyer, which may be French marketing company Publicis Groupe, according to the report. Microsoft was among the better performers on the Dow, gaining 2.2% to $23.86.

Meanwhile, Vodafone (VOD Quote), the world's largest mobile operator by revenue, is reportedly considering an offer to buy T-mobile UK or at least to set up a joint venture, according to the Financial Times . Vodafone shares were 1.1% higher to $19.52.

In other deal news, management consulting firms Towers, Perrin, Forster & Crosby and Watson Wyatt Worldwide (WW Quote) will merge in a deal valued at about $3.5 billion, creating Towers Watson & Co. The combined company is expected to produce revenue of more than $3 billion, and will have a presence in more than two dozen countries. Wyatt Worldwide shares fell 7.7% to $38.

Also Swiss drug maker Novartis (NVS Quote) is in talks to buy certain operations from biotechnology company Elan (ELN Quote), including its multiple sclerosis drug Tysabri and Alzheimer's disease pipeline, according to a report in London's Sunday Times. Novartis shares were down 0.4% at $41.17, while Elan sank 5.6% to $6.95.

The Financial Times reported that Paris-based Sanofi Aventis (SNY Quote) is also preparing to buy more generic drug companies. Separately, the company defended its insulin product Lantus, noting that clinical trials have not shown any association with cancer. Shares rose 5.3% to $29.48.

Stocks overseas were mostly mixed. In Europe, London's FTSE 100 and the Dax in Frankfurt were rising 1.2% and 2.3%, respectively. In Asia, the Nikkei in Japan shed 1%, and the Hang Seng in Hong Kong closed 0.4% lower.

Longer-dated Treasuries were rising. The 10-year was gaining 16/32 to yield 3.48%, while the 30-year added 26/32, yielding 4.28%.