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) said it will develop its own Web browser in an effort to compete with Microsoft (MSFT).

Elsewhere in technology, Alcatel-Lucent (ALU) 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) appointed Stephen Odell to head up its Volvo brand. Odell replaces Frederik Arp.

On the M&A front, Chesapeake Energy (CHK) and BP's (BP) 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) 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), continuing a rumor that has been around for the past couple of weeks.