Stocks rise to ’09 highs after Dubai, Exxon deals

NEW YORK (AP) — Easing concerns about debt problems overseas and a $31 billion takeover deal by Exxon Mobil Corp. nudged major stock indexes to new highs for the year.

The market climbed Monday following news that the Middle Eastern city-state of Abu Dhabi had extended $10 billion to nearby Dubai to help the emirate make debt payments. Analysts have been concerned since last month that a cash crunch in the former boomtown could send ripples through global credit markets.

The market’s advance was uneven after Exxon Mobil said it would acquire XTO Energy Inc. The move will help Exxon tap into the growing supply of natural gas in the U.S. and could signal that more deals are afoot in the energy industry.

A drop in shares of Exxon held the Dow Jones industrial average to more modest gains than other indexes. The Dow added 0.3 percent, while the broader Standard & Poor’s 500 index rose 0.7 percent.

Financial stocks rose after Citigroup Inc. said it would repay the $20 billion it received last year from the government’s financial rescue program. The government also will sell its 34 percent stake in the company. The news came just days after Bank of America Corp. repaid the $45 billion in bailout money it owed taxpayers.

The day’s advance was orderly and signaled that traders remain cautious, as they have for weeks. A big run in stocks that began in March has slowed in the past month as investors look to lock in some of their gains from 2009 and determine how to position themselves for the new year. The Standard & Poor’s 500 index is up 1.7 percent so far this month, after a 5.7 percent gain in November and a 64.7 percent jump since early March.

“Most people, for the most part, have wrapped up the year,” said Blaze Tankersley, chief market strategist at brokerage Bay Crest Partners.

The Dow rose 29.55, or 0.3 percent, to 10,501.05, its highest close since Oct. 1, 2008. The S&P 500 index rose 7.70, or 0.7 percent, to 1,114.11, its highest finish since Oct. 2, 2008. The Nasdaq composite index rose 21.79, or 1 percent, to 2,212.10.

The yield on the benchmark 10-year Treasury note edged up to 3.56 percent from 3.55 percent late Friday as prices fell.

The dollar fell against other currencies, helping to lift most commodities prices. Commodities are priced in dollars and become cheaper for foreign buyers when the greenback falls.

Gold rose, while oil fell 36 cents to settle at $69.51 a barrel on the New York Mercantile Exchange.

Analysts said stocks are likely to drift as investors await comments about the economy and interest rates from the Federal Reserve, which wraps up its last policy meeting of the year Wednesday.

Investors expect the central bank to keep its benchmark interest rate at a historic-low level of near zero. But there is some concern that rates could rise sooner than previously thought as the economy improves.