Stocks Ease Off Highs but Hold to Hefty Gains - TheStreet

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) - Get Report

said it will develop its own Web browser in an effort to compete with

Microsoft

(MSFT) - Get Report

.

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) - Get Report

appointed Stephen Odell to head up its Volvo brand. Odell replaces Frederik Arp.

On the M&A front,

Chesapeake Energy

(CHK) - Get Report

and

BP's

(BP) - Get Report

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.

Airline manufacturer

Boeing

(BA) - Get Report

has been

unable to reach an agreement

with its largest union over a new labor contract, raising the chances of a strike by the International Association of Machinists and Aerospace Workers.

Away from stocks, longer-dated U.S. Treasury securities were trading lower. The 10-year note was down 7/32 to yield 3.84%, and the 30-year was losing 10/32, yielding 4.44%. The dollar was rising sharply against the euro, yen and pound.

Turning to the day's economic data, the U.S. Census Bureau's look at July construction spending showed a 0.6% decline for July, down from a 0.3% increase in June and a wider decline than the 0.4% economists were expecting. The Institute for Supply Management's August manufacturing index registered 49.9, vs. estimates for a read of 50.

Overseas, European indices were looking strong, as the FTSE in London and the Dax in Frankfurt posted gains. In Asia, Japan's Nikkei was dropping, while Hong Kong's Hang Seng was slightly higher.