Stocks Surge on Retail Sales, Earnings

U.S. stocks rallied Monday, completing their recovery from a late February sell-off as Citigroup Inc.'s results, a deal for student lender Sallie Mae (SLM) and upbeat retail data suggested a strong economy.

The Dow Jones industrial average climbed 108.33 points, or 0.86 percent, to end at 12,720.46 — not far below its lifetime high of 12,795.93. The Standard & Poor's 500 Index shot up 15.62 points, or 1.08 percent, to finish at 1,468.47. The Nasdaq Composite Index gained 26.39 points, or 1.06 percent, to close at 2,518.33.

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The Standard & Poor's 500 index rose to a 6-1/2-year high and the Dow climbed to within 75.5 points of its record high set on Feb. 20.

Shares of Citigroup, the largest U.S. financial institution, led advances in both the S&P 500 and the Dow. Wachovia Corp. (WB), the fourth-largest U.S. bank, also gained after posting results that beat expectations.

Data showing a slightly stronger-than-expected rise in March retail sales helped the advance.

"The market has been anticipating the bubble to burst on the consumer front with mortgage problems, but that's not the case," said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey.

The day's advance and recovery from the steep global sell-off on Feb. 27, which was sparked by a sharp drop in China's main stock index, reflected better appetite for equities around the world.

Overseas, the FTSEurofirst 300 index closed at its highest level since December 2000. Japanese stocks also rose, while South Korea's benchmark stock index ended at its ninth straight all-time high.

SLM Corp. , better known as Sallie Mae, said it had accepted a $25 billion takeover bid from two private-investment funds along with two banks — JPMorgan Chase & Co. and Bank of America Corp. SLM Corp.'s shares rose 18.4 percent to $55.35 and ranked as the second-biggest percentage gainer on the New York Stock Exchange.

Citigroup said first-quarter profit fell 11 percent. But results nevertheless topped analysts' forecasts, helped by surging trading gains and signs that Chief Executive Charles Prince's efforts to rein in costs are beginning to bear fruit. Citigroup's shares rose 2.6 percent to $52.93.

Citigroup said trading revenue was a key driver in its results. The Amex Securities Broker Dealer index rose 3.3 percent in its best day since March 21.

Shares of Wachovia gained 2 percent to $55.06.

In addition to the rise in retail sales in March, the government revised February sales sharply upward in a sign of strength in consumer spending, which accounts for two-thirds of economic growth.

The S&P retail index rose 1.3 percent.

On Nasdaq, shares of Google Inc., the Web company, rose. Google has a multiyear advertising sales agreement with the largest U.S. broadcaster, Clear Channel Radio, the companies said Sunday.

Google also said Friday it will acquire DoubleClick Inc., an online advertising network. Google's stock gained 1.7 percent to $474.27 on the Nasdaq.

Also on Nasdaq, shares of Inc. surged 6.6 percent to $45.20 after Deutsche Bank raised its rating on the Internet retailer's shares.

Volume was moderate on the NYSE, where about 1.56 billion shares changed hands, well below last year's estimated daily average of 1.84 billlion. On Nasdaq, about 1.83 billion shares traded, below last year's daily average of 2.02 billion.

Advancers outnumbered decliners on the NYSE by a ratio of about 3 to 1, while on the Nasdaq, more than two stocks rose for every one that fell.

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