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Stock Market Today: Dow Surges Above 17,000 as Citigroup Tops Street

NEW YORK (TheStreet) -- Markets were boasting healthy gains Monday with the Dow Jones Industrial Average closing well above the psychological threshold of 17,000, a level it had dipped below after European markets sold off last week.

Driving factors behind Monday momentum were twofold: Citigroup (C), the second bank to report, recorded second-quarter earnings well over expectations and several pharmaceutical companies spoke of M&A activity.

The Dow hit an intraday record high of 17,088.43 before settling 0.66% higher to 17,056. The S&P 500 climbed 0.48% to 1,977.1, while the Nasdaq gained 0.56% to 4,440.42 This marks the second consecutive session of advances for benchmark indices, though Friday's gains were minor.

Citigroup beat second-quarter earnings estimates, helping to push shares up 3% to $48.42. The bank reported adjusted earnings of $1.24 a share vs. the consensus estimate of $1.05. Citigroup also announced a $7 billion settlement with U.S. authorities over the investigation of its sales of mortgage-backed bonds.

Citigroup's peers rallied in response to the upbeat report. Bank of America  (BAC) added 1.2%, JPMorgan  (JPM) moved 0.88% higher and Goldman Sachs  (GS) jumped 1.3%. JPMorgan and Goldman are due to report before the bell Tuesday, while Bank of America will report Wednesday.

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Mylan (MYL) popped 2.1% to $51.24 after the company said it would buy Abbott's (ABT) non-U.S. developed markets specialty and branded generics business for $5.3 billion in stock.

Shire (SHPG), the Dublin-based drugmaker, said Monday it would be willing to recommend to its shareholders a new $53 billion takeover bid from AbbVie (ABBV). Shire was up 2.1% to $254.27 and AbbVie shares slipped 0.2% to $54.85.

M&A activity was also seen in the energy sector after Whiting Petroleum (WLL) announced it was buying Kodiak Oil & Gas (KOG) for $3.8 billion in stock and the assumption of $2.2 billion in debt. The deal will make it the largest producer in the booming Bakken region of North Dakota and Montana. Whiting shares were advancing 7.7% to $84.58 and Kodiak was tacking on 4.8% to $14.91.

Markets in Europe and Asia were also back in positive territory on Monday. "Reassured that systemic risks from Portugal are very limited, even in a worst case scenario, the dust settled somewhat Friday after Thursday's market tremors," wrote Michala Marcussen, global head of economics at Societe Generale.

As the economy continues to improve and labor market trends point higher, Gina Martin Adams, Wells Fargo Securities' institutional equity strategist, is expecting the S&P 500 to post 6.5% year-over-year EPS growth for the second quarter, up from the 3.3% reported in the first quarter and 3.9% a year ago. Fifty-nine S&P 500 companies are scheduled to report this week.

--By Andrea Tse and Keris Alison Lahiff in New York

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