NEW YORK (TheStreet) -- Stocks closed higher Monday as a surge in M&A activity, a rise in consumer spending and reports that a bailout plan for Greece is in the works eased concerns about the recovery's sustainability.
The Dow Jones Industrial Average closed up 79 points, or 0.8%, to 10,404. The S&P 500 gained 11 points, or 1%, to 1116 and the Nasdaq went higher by 35 points, or 1.6%, to 2274.
"Our concern -- and a broad swatch of the market's concern -- is not whether we're in a recovery, but whether we'll be able to sustain the recovery," said Jim Baird, partner and chief investment strategist for Plante Moran Financial Advisors.Baird said the market is looking for signs that the recovery will hold up even after there's a handoff to consumers when government spending fades. "Signs that there will be some favorable resolution to Greece debt issues, all the M&A news -- which is generally deemed to be a bullish factor for equities -- and signs that consumers are feeling better enough about their situations to ramp up spending, all of these factors came together today to make markets more positive about the recovery's sustainability," Baird said. Personal spending outpaced expectations in January, rising 0.5% compared with the 0.4% increase that economists had been expecting. Personal income, however, grew a meager 0.1% in January, after rising 0.3% in December. Economists had been projecting a 0.4% increase. "We need to see improvement in both the willingness and ability of consumers to spend. Unfortunately, constraints on credit availability and expectations for muted job creation present substantial headwinds to a resurgent consumer," Baird cautioned. After the closing bell, women's clothing retailer Dress Barn (DBRN), like Dillard's (DDS) in the morning, said it swung to a profit and beat earnings forecasts. Dillard's gained 18.7% after its morning report, while Dress Barn went 3.5% higher before its late-afternoon earnings reveal. Retail firms finished broadly higher, as the S&P Retail Index gained 1.6% on the day Investors largely shrugged off news from the Institute for Supply Management showing that its manufacturing index for February came in at 56.5, which was weaker than the reading of 58 that Wall Street had been expecting.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV