Stocks rally anew on more signs of economic health

NEW YORK — Investors are taking the numbers and running with them.

Stocks jumped again Monday, giving the Dow Jones industrials their sixth straight advance, as investors got more robust earnings news from big companies and data that suggests the economy is closer to a recovery. News that CIT had struck a financing deal that will keep the troubled commercial lender out of bankruptcy also drove the market higher.

A 100-point gain pushed the Dow back into the black for the year, while the Standard & Poor's 500 climbed to its highest finish since November.

CIT Group Inc.'s deal with bondholders stoked the market's growing sense of optimism, which got a big boost last week from a string of good earnings news. The company's future was cast in doubt after negotiations with federal regulators for bailout funds fell through. Its failure would have been a blow to investor confidence and would have hurt industries like retailing, which has suppliers who rely on CIT for financing.

The market also got a stream of news that bolstered the argument that the economy is in fact heading for a recovery.

A surprisingly large rise in a predictor of future economic activity also supported stocks. The Conference Board's index of leading economic indicators rose 0.7 percent in June, more than the 0.4 percent forecast. It was the third straight month of gains.

Market indicators jumped about 7 percent last week following a monthlong slide driven by discouraging reports on the economy. Solid earnings and outlooks from leading companies including Goldman Sachs Group Inc., Intel Corp. and International Business Machines Corp. gave investors hope that the worst of the recession could be past.

An even busier week of earnings reports will further shape investors' view of the economy. Reports are due Tuesday from industrial equipment maker Caterpillar Inc. and drug maker Merck & Co.

Among the companies reporting Monday was toy maker Hasbro Inc., which beat the market's expectations and helped reassure investors somewhat about consumers' willingness to spend.

George F. Shipp, chief investment officer at Scott & Stringfellow in Virginia Beach, Va., said word that CIT might be able to sidestep bankruptcy gave investors another sign that the economy and the markets are healing because the government wasn't forced to intervene.

"The private sector is stepping in where the taxpayer didn't have to this particular time. That's the way it's supposed to work," he said.