* CIT rescue bid lifts sentiment
* Caterpillar, Cisco and Disney shares upgraded
* Texas Instruments beats estimates after-hours
* Dow and Nasdaq up 1.2 pct; S&P 500 up 1.1 pct
* For up-to-the-minute market news click []
(Adds Texas Instruments results, more context on U.S. stock
indexes' performance and volume)
By Ellis Mnyandu
NEW YORK, July 20 (Reuters) - U.S. stocks jumped on
Monday, driving the S&P 500 to an eight-month closing high,
after CIT Group Inc was thrown a lifeline to avoid bankruptcy,
and investors bet corporate America would log another strong
set of earnings this week.
Broker upgrades of technology bellwethers, including Cisco
Systems <CSCO.O>, propelled the Nasdaq to its ninth straight
daily advance -- matching a streak from July 1998. The Nasdaq
closed at a high for the year.
CIT <CIT.N>, a lender to nearly 1 million small- and
mid-sized U.S. companies, reached a deal with bondholders for
$3 billion in emergency financing, a source familiar with the
situation said. CIT's shares soared 78.6 percent to $1.25.
(For details see [].
Investors were encouraged by signs that the CIT rescue was
a private-sector measure instead of a government bailout.
"The private money is really the smarter money. They are
not going to go in there unless they think it's going to
work," said Tom Alexander, head of Alexander Trading, in
Savannah, Georgia. "I think that's a healthy sign for the
market and a sign of liquidity and a willingness of private
participants to step up to the plate."
The Dow Jones industrial average <> shot up 104.21
points, or 1.19 percent, to 8,848.15. The Standard & Poor's
500 Index <.SPX> gained 10.75 points, or 1.14 percent, to
951.13. The Nasdaq Composite Index <> rose 22.68 points,
or 1.20 percent, to 1,909.29.
NASDAQ UP 21 PERCENT FOR 2009
Monday's rally extended the market's recovery since the
12-year lows in early March. The Nasdaq hit its highest close
since October 2008, while the Dow registered its highest close
since January 2009.
The gains put both the blue-chip Dow average and the S&P
500 back into positive territory for the year, with the Dow up
0.81 percent and the S&P 500 up 5.3 percent.
At Monday's close, the Nasdaq was up 21 percent for the
year. From a March 9 closing low of 1,268.64, the Nasdaq is up
50.5 percent. Wall Street traditionally defines a bull market
as a gain of 20 percent from a recent low.
Analysts who focus on technicals expect more upward
momentum after the S&P 500 punched through near-term
resistance at the 950 level.
TEXAS INSTRUMENTS SLIPS LATE
After the closing bell, chipmaker Texas Instruments Inc
<TXN.N> posted a stronger-than-expected operating
second-quarter profit, but its stock slipped 1.1 percent to
$23.35. The stock had ended regular trading at $23.61.
This week, the earnings season picks up after a strong
start from companies such as Goldman Sachs Group Inc <GS.N>
and Intel Corp <INTC.O>.
Before Monday's opening bell, 71 percent of 55 S&P 500
companies that had reported earnings so far beat expectations,
according to data compiled by Thomson Reuters.
Several analysts upgraded bellwether stocks, including
three Dow components, on Monday.
Bank of America-Merrill Lynch raised Caterpillar Inc
<CAT.N> to "buy," saying the second quarter could mark a
bottom for the construction sector. []
Caterpillar advanced 7.8 percent to $36.65 and gave the
top boost to the Dow, followed by United Technologies Corp
<UTX.N> -- another big manufacturer -- up 2.2 percent at
$54.97.
CISCO AND DISNEY CLIMB
Elsewhere, Credit Suisse upgraded Cisco Systems Inc
<CSCO.O> to "outperform," saying field checks indicated that
business trends were improving throughout the quarter. Cisco's
routers and other networking gear form the backbone of
corporate technology infrastructure. []
Cisco's stock gained 3.1 percent to $21.15 on Nasdaq. The
stock, recently named among the 30 Dow industrials, also
helped lift the blue-chip average.
Morgan Stanley lifted Walt Disney Co <DIS.N>, the
entertainment and consumer products company viewed as a major
proxy for consumer spending, to "overweight" from
"equal-weight" as part of a larger call on the media sector,
which was raised to "attractive." []. Disney, a
Dow component, gained 3.5 percent to $25.37.
Halliburton Co <HAL.N>, Johnson Controls Inc <JCI.N>,
Eaton Corp <ETN.N> and Hasbro Inc <HAS.N> all advanced after
quarterly results impressed investors.
Driven higher by corporate earnings, the broad S&P 500
finished up 7 percent last week, its best week since
mid-March. At Monday's close, the S&P 500 was up 40.6 percent
from the 12-year closing low on March 9.
On the economic data front, the index of leading economic
indictors, which gauges U.S. economic prospects for the next
six to nine months, increased in June for the third straight
month, suggesting the recession was drawing to a close, the
Conference Board said. []
Volume was light on the New York Stock Exchange, with 1.13
billion shares changing hands, well below last year's
estimated daily average of 1.49 billion, while on the Nasdaq,
about 2.08 billion shares traded, below last year's daily
average of 2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by
a ratio of slightly more than 3 to 1, while on the Nasdaq, two
stocks rose for every one that fell.
(Reporting by Ellis Mnyandu; editing by Jan Paschal
