Stimulus Talk Prods Bulls; Dow Soars 413

Energy shares were major contributors to the day's rally. The Energy Select SPDR (XLE Quote), an exchange-traded fund that holds integrated oil and gas companies as well as oil-services names, jumped 11% to $51.11.

Ericsson (ERIC Quote) announced a 28% decline in third-quarter earnings, but beat analyst estimates. Shares rose 16% to $8.03.

Swiss pharmaceutical company Novartis (NVS Quote) said its profit climbed 12% year over year on rising sales. The stock added 2.4% to $52.15.

Electronics retailer Circuit City (CC Quote) was in the news after a report in the Journal said it may close 150 stores and slash its head count. Shares dropped 10% to 35 cents. The Journal also reported that Internet portal Yahoo! (YHOO Quote) would probably announce layoffs, perhaps as early as Tuesday's earnings report. The stock was down 0.3% to $12.86.

Meanwhile, utility services firm Exelon (EXC Quote) offered to buy NRG Energy (NRG Quote) for $6.2 billion in an all-stock deal. Exelon inched up 0.2% to $54.59, and NRG soared 29% to $25.

In analyst actions, Goldman Sachs downgraded Intel (INTC Quote) to neutral from buy, predicting a decline in profit margins. The stock nevertheless rose 3.5% to $16.04.

BlackBerry maker Research In Motion (RIMM Quote) was suffering after Morgan Keegan reduced its estimates for the company's revenue growth. Shares were down 8.6% to $53.91.

Shifting to economic data, the Conference Board's leading indicators index for September climbed 0.3%, whereas economists had predicted a decline of 0.2%. The August reading was revised to a 0.9% drop.

As for commodities, crude oil added $2.40 to close at $70.25 a barrel. Gold climbed $2.30 to $790 an ounce.

Longer-dated U.S. Treasury securities were edging higher. The 10-year was up 24/32 to yield 3.84%, and the 30-year was gaining 1-12/32, yielding 4.24%. The dollar was stronger vs. its major foreign competitors.

Abroad, European exchanges including the FTSE in London and the Dax in Frankfurt traded higher. In Asian markets, Japan's Nikkei and Hong Kong's Hang Seng closed with gains.