NEW YORK ( TheStreet) -- Stocks gained momentum in the final hour of trading on Monday, pushing close to session-highs on their way to a fourth straight positive finish. More heartening economic data, another spate of deal-making and greater clarity for the financial sector following the announcement of new tighter global capital standards for the banks saw bulls returning to the market with new vigor. The Dow Jones Industrial Average was up 81 points, or 0.8%, to 10,544. The S&P 500 was higher by 12 points, or 1.1%, to 1,122. The Nasdaqoutperformed the other bluechip indices, rising 43 points, or 2%, to end at 2,285. Technology stocks helped drive the Nasdaq higher. Shares of Apple ( AAPL), Microsoft ( MSFT) and Intel ( INTC) led the group in terms of high-volume trading. Volumes improved on Monday's trading as traders and investors returned back to the markets following the holiday. Breadth was extremely bullish with advancers outnumbering decliners by a 4-to-1 ratio. Financial stocks were the leaders of the pack on Monday after the
Basel Committee on Bank Supervision announced Sunday the adoption of higher capital standards. The new rules boost the minimum common equity capital standard to 4.5%, from 2%, along with a capital conservation buffer of 2.5% to withstand future periods of stress. The new looser-than-expected standards will be phased in over a long timeline beginning in 2015, giving banks more time than previously thought to adjust to the new rules. Bank of America ( BAC) shares rose 2.9% to $13.95. Large money-center banks JPMorgan Chase ( JPM) and Wells Fargo ( WFC) gained 3.4% and 2.8%, respectively. The KBW Bank Index, comprising 24 large-cap banks, added 3.1% while the Financial Select Sector SPDR ( XLF), an exchange-traded fund that tracks the financial sector, pushed up 1.9%. "With the new Basel capital standards, you can check off another item of uncertainty off the list," said Jay Suskind, senior vice president at Duncan Williams, noting that the banks have eight years to comply with the standards. "The market is looking at the glass half-full rather than half-empty now and they liked what they saw," he added. Stocks in the materials and capital goods sectors also helped drive the day's rally on the latest Chinese economic data. China's industrial production grew 13.9% in August, while retail sales in the country rose 18.4%. The data helped to ease concerns about an abrupt slowdown in China's economy since it pointed to a more moderately paced slowdown. Economists view economic growth in China as helping to offset sluggish demand elsewhere in the world and a good sign for global economic strength. That helped spark a global rally. Japan's Nikkei ended 0.9% higher, while Hong Kong's Hang Seng Index jumped 1.9%. The FTSE in U.K. closed the day higher by 1.1% and Germany's DAX finished 0.7% higher. In U.S. economic news, the Treasury Department said the government's budget deficit was smaller in August year-over-year, thanks to rising tax receipts. The deficit totaled $90.5 billion last month, smaller than the $104 billion economists expected, according to Briefing.com, and down 12.6% from a deficit of $103.6 billion in August of 2009. The Congressional Budget Office forecast the deficit this fiscal year will reach $1.34 trillion, the second-largest on record, despite higher tax revenues being generated by the economic recovery. "We're seeing the revenue coming back," Scott Brown, chief economist at Raymond James, told Bloomberg. "The cumulative deficit for the fiscal year is a bit smaller, but still fairly wide. It doesn't signal a lot of improvement."
In corporate news,
Wal-Mart ( WMT) will begin offering its first self-branded cell phone plan. The discount behemoth said the Wal-Mart Family Mobile service, which will be offered starting next week, will run on T-Mobile USA's network. Unlimited calling and texting will cost $45 per month for the first line and $25 for each additional line for the family. Wal-Mart shares added 0.5% to close at $52.22. Hewlett-Packard ( HPQ) reached an agreement to acquire security software maker ArcSight ( ARST) for $1.5 billion. Shares of Hewlett-Packard edged 0.2% higher to $38.29 while ArcSight zoomed 25.1% higher to $43.91. Hertz ( HTZ) rose 7.7% to $10.83 after Dollar Thrifty ( DTG) agreed to its increased takeover bid of $50 of cash and stock per share. Dollar Thrifty shares gained 5.4% to $50.59. Google ( GOOG) is set to conduct a two-day trial of live video programming on YouTube which, if successful, could signal its biggest push into an era of live streaming on the Internet. Google shares bid up 1.3% to $482.27. Germany's Deutsche Bank ( DB), one of Europe's stronger banks, confirmed on Sunday that it plans to raise capital of up to 9.8 billion euros ($12.47 billion) to fund its consolidation with Deutsche Postbank and to accommodate new regulatory changes. Deutsche Bank's shares listed on the New York Stock Exchange were 2.9% higher to $62.30. BP ( BP) told Citigroup ( C) analysts that it expects legal claims surrounding the Gulf of Mexico oil spill to be less than the $20 billion it had previously set aside for the disaster, Bloomberg reported. The oil company's American depositary receipts traded 0.3% higher to $38.33. Washington Post ( WPO) shares fell 0.6% to $376.60, off earlier lows, after a Department of Education report showed student loan default rates for for-profit schools rose to 11.6% from 11%, sparking concerns about the health of the Post's largest division, Kaplan Education. The Post disputed the report, pointing out that it serves "non-traditional" students. Genzyme ( GENZ) shares pushed 0.7% lower to $70.29 after the biotechnology firm agreed to sell its genetic testing unit to LabCorp ( LH) for $925 million in cash. ADRs of Nokia ( NOK) gained 2% despite the telecom firm's word that the head of its mobile business unit, Anssi Vanjoki, resigned just days after a new CEO was appointed. Seattle Genetics ( SGEN) shares tumbled 4%. The biotechnology firm said it halted the development of lintuzumab after the experimental leukemia drug failed to prolong survival in patients. In commodity markets, crude oil for October delivery rose 74 cents to settle at $77.19 a barrel, following a pipeline breakdown that disrupted supplies to the Midwest. Meanwhile, the December gold contract settled flat at $1,246.8 an ounce. The benchmark 10-year Treasury note was up by 16/32, diluting the yield to 2.737%. The dollar was trading markedly lower against a basket of currencies, after China allowed the Yuan to appreciate to a fresh high of 6.7618 against the dollar. The yuan's rise ignited speculation that the tightly controlled currency will be allowed to rise further, The Wall Street Journal reported. The dollar index was down by 1.2%. --Written by Shanthi Venkataraman and Miriam Marcus Reimer in New York.