Stocks gained on Monday, buoyed by relief that Iraq's historic election went off without major disruptions, but that was not enough to prevent a lower finish for the month of January. Monday's rally also got some fuel from a spurt of deal activity, such as Citigroup Inc's plans to sell its insurance unit. Citigroup, a Dow component, rose 1.4 percent after saying it plans to sell the unit to life insurer MetLife Inc for $11.5 billion.
Earnings news from companies such as Exxon Mobil Corp also boosted investor confidence. Exxon, the world's largest publicly traded oil company and a Dow component, reported the highest quarterly profit in its history.
The Dow Jones industrial average was up 62.74 points, or 0.60 percent, to close at 10,489.94. The Standard & Poor's 500 Index was up 9.91 points, or 0.85 percent, to end at 1,181.27. The Nasdaq Composite Index was up 26.58 points, or 1.31 percent, to finish at 2,062.41.
"We finally have a market reacting to good news," said John Caldwell, chief investment strategist at McDonald Financial Group. "We've got good earnings reports, some big merger news - which always seems to warm up Wall Street traders - and we've put the Iraqi elections behind us. Hopefully, investors can now focus on what are still solid underlying fundamentals in the market."
According to the Stock Trader's Almanac, in the last 13 years following a presidential election, the market's direction for the full year followed January's direction - with the exception of 2001.
For the month, the Dow ended down 2.7 percent, the Nasdaq declined 5.2 percent and the S&P 500 slipped 2.5 percent.
Helping the market on Monday was reassurance over Iraq's historic election, which was hailed around the world as a success. It drew millions of voters and took place without major disruptions.
In economic news, the Chicago Purchasing Management Index rose unexpectedly in January, showing that business activity in the US Midwest expanded for the 21st straight month.
Stocks advanced despite higher oil prices. High crude costs usually hurt equities because they can curb corporate profits and consumer spending. NYMEX crude for March delivery jumped $1.02 to $48.20 a barrel.
Exxon Mobil rose 33 cents, or 0.6 percent, to $51.60, after reporting the biggest quarterly profit ever for a US company, with earnings driven by high crude oil and natural gas prices.
In other earnings news, Mattel Inc jumped nearly 6 percent, or $1.10, to $19.45 after the No 1 toy maker said fourth-quarter earnings rose 33 percent.
But drugmaker Wyeth fell nearly 8 percent, or $3.35, to $39.63, after warning of disappointing profit for 2005. Marsh & McLennan Cos rose 4.5 percent, or $1.41, to $32.50 after the company said it will pay $850 million to settle charges with the New York attorney general's office that it conspired with insurers to rig bids. The settlement raised hopes the company could put the scandal behind it.
Citigroup rose 67 cents to $49.05 while MetLife fell 19 cents to $39.75.
Overall, trading was active, with 1.68 billion shares changing hands on the New York Stock Exchange, above the 1.46 billion daily average for last year. About 1.83 billion shares were traded on Nasdaq, just above the 1.81 billion daily average last year. Advancers outnumbered decliners on the New York Stock Exchange by 13 to 4 and by 11 to 4 on Nasdaq.