US Market

U.S. stocks rallied Monday in some of the thinnest trading of the summer, highlighted by gains for insurers amid relief over Hurricane Irene's relatively light touch on major cities. The Dow Jones Industrial Average jumped 254.71 points, or 2.3%, to 11539.25, closing near session highs and moving within half a percentage point of break-even for 2011. The Standard & Poor's 500-stock index gained 33.28 points, or 2.8%, to 1210.08. The Nasdaq Composite soared 82.26 points, or 3.3%, to 2562.11.

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Insurance stocks leaped as analysts concluded that the hurricane that swept across the East Coast wasn't as damaging as feared. Hartford Financial Services Group led the S&P 500 with a gain of 13%. Insurer Lincoln National was another high performer, rising 8.9%. Travelers was one of the blue-chip Dow's strongest components as it advanced 5.1%. Bank of America led the blue-chip Dow as it leaped 8.1%. The company agreed to sell half its stake in China Construction Bank, booking a $3.3 billion gain. The move adds another significant boost to Bank of America's capital position.

Trading activity was light, as many market participants faced a daunting commute after the storm downed power lines and limited transportation options up and down the Eastern seaboard. Vacationing traders ahead of the Labor Day weekend helped keep market activity limited. Roughly 3.6 billion shares changed hands in New York Stock Exchange composite volume, versus an August daily average of 5.94 billion as of Friday. Stocks' gains were nevertheless broad. Every sector of the S&P 500 advanced.

Market sentiment got a lift from government data showing that Americans increased spending in July by the most in five months. Also helping sentiment, European stocks rallied after Greece's EFG Eurobank and Alpha Bank were set to merge, raising hopes that takeovers can help banks weather the sovereign-debt crisis. Many investors were also focused on a less dire than expected assessment of the U.S. economy delivered by Federal Reserve Chairman Ben Bernanke on Friday at Jackson Hole, Wyo.

European Market

European stock markets ended with strong gains Monday, led by bank and energy companies' shares after a speech by Federal Reserve Chairman Ben Bernanke last week inspired investors to buy riskier assets and as a merger of two Greek banks sent shares soaring in Athens. The Stoxx Europe 600 index rose 1.2% to close at 228.28, after closing up 1% last week, snapping a four-week losing streak.

Greek stocks were among the strongest performers in Europe, with the Athens General Index rising 14% after EFG Eurobank Ergasias SA and Alpha Bank SA announced a friendly merger deal. Shares of the two banks surged around 30% each. Other shares in Athens also surged, notably banks, with Piraeus Bank and National Bank of Greece SA rising around 29%.

Enthusiasm for stocks was driven by Bernanke's comments Friday that the Federal Open Market Committee would weigh options on monetary policy at the panel's next meeting in September. Relief that damage from Hurricane Irene wasn't as bad as feared also helped boost equities. Elsewhere in Europe, Banco Santander SA added 2.1%, driving the IBEX 35 index up 2.5%.

Energy stocks also gained as Bernanke's comments fueled some appetite for assets perceived as riskier. Shares of Total SA surged 2% and Societe Generale SA added 3.6%, supporting the France CAC 40 index which rallied 2.2% to end at 3,154.20. The German DAX 30 index gained 2.4% to close at 5,670.07, supported by a 5.2% rise for potash producer K+S AG and utility RWE AG. E.ON AG rose 4.6%. Markets in London were closed Monday for a holiday.

Asian Market

Most Asian stock markets rose Monday, with buyers encouraged by Wall Street's advance Friday after a speech by Federal Reserve Chairman Ben Bernanke. Chinese stocks were sold down, however, as concerns about monetary tightening returned.

Reports said the People's Bank of China has announced new measures that would in effect increase the amount banks must set aside as reserves. South Korea's Kospi added 2.8% to 1,829.50 and Taiwan's Taiex advanced 1.8% to 7,578.01. Japan's Nikkei Stock Average finished the day 0.6% higher at 8,851.35, while Hong Kong's Hang Seng Index rose 1.4% to 19,865.11 and India's Sensex rose 3.6% to 16416.33. But the Shanghai Composite Index declined 1.4% to 2,576.41, following media reports that China has asked banks to include their margin deposits in the reserves required at the central bank. The move will drain liquidity from the financial system. In Shanghai trading Monday, China Merchants Bank Co. dropped 2.9% and China Citic Bank Corp. lost 3.7%. Industrial & Commercial Bank of China Ltd. gave up 1.9%.

In Hong Kong, China Merchants Bank fell 0.3% and Citic gave up 2.7%, but ICBC jumped 3.3%, extending last week's strong gains after posting solid first-half results. Meanwhile, strong gains for Chinese energy stocks supported the broader market in Hong Kong, after refining giant China Petroleum & Chemical Corp., or Sinopec, posted first-half results that beat estimates. Sinopec shares jumped 6.7%, while fellow energy-sector firms PetroChina Co. and Cnooc Ltd. added 2.9% and 3.5%, respectively.

Chip-equipment stocks were strong on hopes that dynamic random-access memory, or DRAM, prices may be approaching a bottom. Elpida Memory Inc. rose 3.2% in Tokyo, while Hynix Semiconductor Inc. jumped 8.4% and Samsung Electronics Co. climbed 1% in Seoul. Stock gains in Tokyo were muted even as Finance Minister Yoshihiko Noda was elected in presidential elections in the ruling Democratic Party of Japan, paving the way for him to become Japan's next prime minister.

Commodities

U.K. markets were closed Monday for a holiday. Oil futures rallied sharply Monday as traders took cues from the rising stock market and shrugged off the relatively mild impact of Hurricane Irene. Light, sweet crude for October delivery settled up $1.90, or 2.2%, at $87.27 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures Europe exchange traded up 70 cents, or 0.6%, at $112.06 a barrel.

Trading on the Nymex began as usual Monday, although volumes were thin, after a weaker than expected Hurricane Irene spent the weekend barreling through the U.S. Northeast. Gold futures eased Monday as upbeat market sentiment boosted equities and damped investor demand for the metal as a store of wealth.

The most actively traded gold contract, for December delivery, fell $5.70, or 0.3%, to settle at $1,791.60 a troy ounce on the Comex division of the New York Mercantile Exchange. Trading volume was low Monday, as markets were closed in the U.K. and some U.S. trading houses were lightly staffed following transportation disruptions caused by Hurricane Irene during the weekend.