Stocks rose Monday, extending the first weekly gain since July for the S&P 500, amid optimism the global economy will recover and after Hurricane Irene failed to shut financial markets.
The Dow Jones industrial average closed up 254.71, or 2.26%, at 11,539.25; the S&P 500 rose 33.28, or 2.83%, at 1,210.08; and the Nasdaq composite ended the session up 82.26, or 3.32%, at 2,562.11. All numbers are preliminary.
The S&P 500 Insurance index of 22 stocks rallied as much as 4.4%, the biggest gain within 24 industries in the benchmark gauge, as Hurricane Irene's estimated cost declined with the storm losing strength en route to New York.
Equities climbed after Americans' spending increased more than economists forecast while incomes grew at the projected pace. Purchases rose 0.8%, the biggest gain since February, after a 0.1% decline the prior month, Commerce Department figures showed Monday in Washington.
S&P 500 futures also advanced after two Greek banks, EFG Eurobank Ergasias and Alpha Bank, discussed merging to bolster their assets. Equities in Greece rallied the most in more than 20 years.
Stocks rose even after a report showed that the number of contracts to purchase previously owned U.S. homes fell in July for the first time in three months, a sign that lower prices and borrowing costs aren't luring in buyers.
Hurricane Irene's estimated cost to insurers fell to about $2.6 billion, according to Kinetic Analysis Corp., a firm that predicts the effects of disasters. That compares with a projection last week from the company of as much as $14 billion when Irene was forecast to make landfall in New York as a Category 2 hurricane. Total economic losses, including those that aren't insured, may be about $7 billion.