Stocks started the week with big gains Monday on a major telecommunications deal and signs that Japan's nuclear crisis was stabilizing. The Dow Jones industrial average closed above 12,000 for the first time since a nuclear power plant in Japan failed following a massive earthquake and tsunami.
In the U.S., AT&T Inc. said it would buy rival T-Mobile USA for $39 billion, creating the largest U.S. cell phone company. Charles Schwab Corp. said it would buy online brokerage services provider OptionsXpress for $1 billion. The deals raised hopes that more corporate buyouts could be on the way as businesses become more confident in the economic recovery.
"You only expand when you have a good feeling about the future," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners.
The Dow Jones industrial average rose 178.01 points, or 1.5 percent, to 12,036.53. The index has gained 3.6 percent over the last three trading days, its largest jump over the same amount of time since September.
The S&P 500 index gained 19.18, or 1.5 percent, to 1,298.38.
The Nasdaq composite rose 48.42, or 1.8 percent, to 2,692.09.
Energy stocks led the market higher after oil prices climbed back above $103 per barrel.
Worries about Japan's stricken nuclear reactors eased.
The violence in Libya and Japan's earthquake have led to many large swings in the Dow since late February. The Dow rose or fell by 100 points or more during three days last week. Eight of the 15 trading days since the start of March have had swings that large.
Five stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 4.5 billion shares.