Stocks Ease Off Highs but Hold to Hefty Gains

Updated from 9:49 a.m. EDT

Stocks in New York leapt out of the gate Tuesday, after a weaker-than-feared Hurricane Gustav failed to cause major oil-supply disruptions over the holiday weekend, sending the price of crude substantially lower.

The Dow Jones Industrial Average soared 205 points to 11,748, and the S&P 500 jumped 15 points to 1297. The Nasdaq added 29 points to 2396.

As trading got underway for the Labor Day-shortened week, the price of crude oil was plummeting $7.10 to $108.36, after Gustav hit the Louisiana coast but largely spared New Orleans and energy-production facilities in the area. Gold was down $32.60 to $802.60.

As for corporate news, Internet company Google (GOOG Quote) said it will develop its own Web browser in an effort to compete with Microsoft (MSFT Quote).

Elsewhere in technology, Alcatel-Lucent (ALU Quote) appointed Ben Verwayyan, former head of BT Group, as its new CEO. Alcatel-Lucent also selected Philippe Camus to be its nonexecutive chairman.

In another shakeup, Ford (F Quote) appointed Stephen Odell to head up its Volvo brand. Odell replaces Frederik Arp.

On the M&A front, Chesapeake Energy (CHK Quote) and BP's (BP Quote) American business announced a deal that would give BP 25% interest in Chesapeake's Fayetteville Shale development for $1.9 billion.

Shares of Sciele Pharma (SCRX Quote) were rising after Japanese company Shionogi said it would buy the drugmaker for $1.1 billion.

Meanwhile, a Korea Development Bank executive confirmed the bank is holding discussions to buy a stake in struggling brokerage Lehman Brothers (LEH Quote), continuing a rumor that has been around for the past couple of weeks.