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The Final Hour: No News is Good News for Stocks

NEW YORK (TheStreet) -- No news is good news -- and an absence of bad news was all that was needed to push the S&P 500 and Dow Jones to fresh highs on Monday, underpinned by a rebound in tech stocks and small caps.

Driving the optimism was a mostly peaceful weekend vote in Ukraine that saw a win handed to pro-Russian separatists, but had few immediate consequences. Meanwhile China, the world's second-largest economy, announced capital market reforms that bolstered sentiment on the Shanghai and Hong Kong bourses.

Closer to home there was scant economic data, giving bears little reason to fret over what continues to be a mixed recovery. Earnings season is also drawing to a close and has been largely in line with low expectations (if you can't meet decent hurdles, just lower them) while M&A continues: Pinnacle Foods  (PF) surged nearly 14% after Hillshire Brands  (HSH) agreed to buy it for about $6.6 billion on Monday.

Long story short: with few other places to put their money amid a rising rate backdrop and absence of obvious risk, investors will push equities higher. Yes, valuations may be stretched and Europe appears to represent better value -- but since when have Americans been enthusiastic offshore investors?

Small caps and tech stocks were the stars of Monday's show. The Nasdaq was jumping more than 1.60% in late afternoon trade while small caps as represented by the Russell 2000 had their biggest one-day gain in more than a month, rising more than 2%. Small caps are seen as a crucial gauge of investor risk appetite, with the sector typically outperforming amid a bull market. But traders warn not to read too much into strong one-day moves in tech -- reminding pundits that the near 6% jump in stock such as Twitter (TWTR) and the 4%+ gain in Netflix (NFLX) were likely a resurgent flicker of momentum trading -- one that could easily die with the next spark of investor defensiveness.

-- By Jane Searle in New York

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