NEW YORK ? Wall Street indexes rose to new 2009 highs Monday on the heels of a global rally as sentiment was lifted by a surprise aid plan for Dubai, and Citigroup's plan to exit a US government bailout.
A big takeover deal in the energy sector in which ExxonMobil agreed to buy XTO Energy also helped keep the mood positive, although gains were capped by caution over this week's Federal Reserve monetary policy meeting.
The Dow Jones Industrial Average rose 29.55 points (0.28 percent) to 10,501.05, its best close since October 1, 2008.
The Nasdaq composite climbed 21.79 points (0.99 percent) to 2,212.10 and the Standard & Poor's 500 index added 7.70 points (0.70 percent) to 1,114.11.
Market action came after Dubai share prices surged by more than 10 percent, boosted by a $10-billion handout from Abu Dhabi to help deal with debts of its Nakheel property developer and its parent firm Dubai World.
In the United States, Citi's decision to repay $20 billion from the government's Troubled Asset Relief Program (TARP) under a plan to exit a bailout helped sentiment, as did the ExxonMobil deal for $41 billion, one of the biggest of the year.
"Increased confidence in the global credit markets, combined with a considerable acquisition in the commodities (sector), helped the major market indexes muscle higher today," said Andrea Kramer at Schaeffer's Investment Research.
Some analysts said the gains were held in check by caution ahead of the outcome of a two-day Federal Reserve policy meeting opening Tuesday.
"Price momentum in the stock market stalled out last week," said Fred Dickson, market strategist at DA Davidson & Co. "We do not expect to see much pickup until after the Fed announcement on Wednesday."
Although the Fed has signaled it is unlikely to abandon its near-zero interest rates and special liquidity programs to stimulate the economy, Dickson said that "investors typically react to minor wording changes in the Fed's statement."
Among key stocks, XTO rallied 15.35 percent to $47.86, helped by the premium offered in the all-stock deal from ExxonMobil, which fell 4.31 percent to $69.69.
Citigroup fell 6.33 percent to $3.70 after announcing plans to repay $20 billion to the US Treasury and begin an exit from a massive bailout, moves that will dilute existing shareholders and result in a short-term loss.
In the tech sector, Oracle rallied 2.33 percent to $23.31 after news that the business software giant was agreeing to concessions to alleviate European Commission concerns about its planned takeover of Sun Microsystems, up 11 percent at $9.28.
Google climbed 0.88 percent to $595.73 amid increasing reports that the Internet giant was readying plans to launch its own smartphone.
Bonds were mixed. The yield on the 10-year Treasury bond rose to 3.546 percent from 3.540 percent Friday and that on the 30-year bond dropped to 4.475 percent against 4.497 percent. Bond yields and prices move in opposite directions.
