U.S. stocks rose after Cyprus secured a bailout to prevent the collapse of its banking system. The deal boosted the Standard & Poor's 500 index to within a half-point of its record high.
The S&P 500 rose 0.5 percent shortly after the market opened. It climbed in early trading to within a half-point of its all-time high, set in October 2007. The Dow Jones industrial average rose 0.3 percent, the Nasdaq composite 0.5 percent.
International lenders agreed early Monday to release 10 billion euros of emergency rescue funds for Cyprus. The European Central Bank will continue to support the nation's foundering banks. In exchange, Cyprus will shrink its banking industry, cut its budget, implement economic reforms and privatize some state assets. The measures will result in heavy losses for its banks' bondholders and people with large deposits in banking accounts.
The deal to save Cyprus' banks erased a crucial source of anxiety for investors, who have traded for more than three years under the cloud of a debt crisis in Europe. The fear is that a heavily indebted country will default on its financial obligations and be forced to exit the shared currency. That could cause the euro zone to unravel, deepening the recession there and roiling international financial markets.
Concern about Cyprus squelched a rare 10-day rally for the Dow earlier this month. Investors watched closely over the past week as the small, Mediterranean island scrambled to satisfy its lenders and prevent its banks from collapsing.
European markets added to earlier gains after Wall Street opened. The main indexes in Paris, London and Frankfurt all were up 0.7 percent. Earlier, Asian stocks closed mostly higher.
The S&P 500 rose seven points to 1,564, led by Apollo Group Inc. and Dollar General. Computer maker Dell Inc. also boosted the index as a bidding war broke out among investors who want to take the company private.
The Dow rose 41 points to 14,552. The Nasdaq added 15 points to 3,260.
As the final week of trading this quarter kicks off, the indexes are holding onto gains built during the long rally earlier this month. The Dow is up more than 11 percent, the S&P 500 nearly 10 percent.
Among the companies making big moves:
— Apollo Group soared after the for-profit education company said its quarterly net income exceeded Wall Street's expectations. The stock rose $2.11, or 12 percent, to $19.15.
— Dollar General's quarterly net income rose as the chain discounter attracted more customers and sold more goods. The discount retailer rose $1.41, or 3 percent, to $51.48.
— Dell rose 43 cents, or 3 percent, to $14.57. The company received competing bids from activist investor Carl Icahn, who offered $15 per share, and buyout firm Blackstone Group, which proposed a deal worth $14.25 per share. Founder Michael Dell had been in talks to take the company private for about $13.65 per share.
Daniel Wagner can be reached at www.twitter.com/wagnerreports.
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