U.S. stocks rise as China stands pat on rates

NEW YORK (MarketWatch)

Stocks finished higher Monday after China refrained from hiking interest rates in spite of inflation concerns.

The Dow Jones Industrial Average rose 18.24 points, or 0.2%, to 11,428.56.

Caterpillar , a bellwether for the global economy, was the blue-chip average’s best performer, rising 1.9%, while Walt Disney gained 1.3% and Chevron tacked on 1.5%.
General Electric shares slipped 0.6% after the conglomerate said it will offer $1.3 billion for Wellstream Holdings (+5.69%) , a maker of flexible pipeline products for the oil-and-gas industry. The move fits with GE’s strategy to expand its industrial businesses with acquisitions. Wellstream’s board of directors said it will recommend shareholders accept the deal.
Monday’s gains came after the People’s Bank of China chose not to raise interest rates following strong inflation data released over the weekend.
On Friday, China had raised banks’ reserve-requirement ratio for the third time in a month.
“China’s rates issue is fairly big just from the standpoint that if its economy doesn’t slow dramatically, it’s certainly good for the export picture for the U.S.,” said Bruce McCain, chief investment strategist at Cleveland’s Key Private Bank, an arm of KeyCorp.
“Anything that puts them on hold or slows their efforts to dampen inflation is good for the U.S.”

The S&P 500 index gained 0.06 point to 1,240.46, led by energy and materials stocks.
“The momentum continues and we’re seeing confidence build,” said Michael Church, president of Addison Capital.
The S&P 500 has risen in 12 of the past 15 weeks and traded at its highest level since September 2008.
The technology-oriented Nasdaq Composite fell 0.5% to 2,624.91 after closing Friday at its highest level since December 2007.
“Bullish sentiment is increasing, but for now it’s not at extreme levels,” Church added, which bodes well for future gains. “It’s not like everyone is wildly bullish. It’s not pervasive across the board.”
Still, not everyone’s convinced the market will keep marching higher as the year-end approaches.
“The market’s climbing a wall of worry,” said Todd Morgan, senior managing director at Bel Air Investment Advisors.
“We’ve had a terrific rally here, but all great climbers must rest... I wouldn’t be surprised to see the market rest from here” through the end of the year.
Investors are also gearing up for the outcome of the Federal Reserve’s next policy meeting Tuesday afternoon.
But market participants expect little change from the central bank with respect to its near-term outlook for monetary policy or its second round of quantitative easing, dubbed QE2.
Demand for U.S. Treasurys rose, as the yield on the 10-year note fell to 3.286%.
The euro firmed to $1.3415, compared with $1.3228 late Friday in New York.
The dollar edged lower, with the U.S. dollar index (DXY 79.35, -0.72, -0.90%) , which tracks the U.S. currency against a basket of six others, off 0.9%.
Crude-oil futures edged up toward $90 a barrel.
Among stocks in focus, said it will buy Compellent Technologies Inc. for $27.75 a share, slightly more than it had originally indicated. Dell said last week that it was in exclusive talks to buy the data-storage provider.
Dell shares slipped 3.9%, while Compellent dropped 2.5% to $27.98
Thermo Fisher Scientific said it will acquire Dionex Corp. for $2.1 billion, expanding its presence in markets such as environmental analysis, water testing and food safety.
Thermo Fisher shares rose 4.8%, while Dionex surged 20%.
Huntington Bancshares Inc. said it plans to offer $920 million in common stock and $300 million in debt to help repay the $1.4 billion it received under the Treasury’s Troubled Asset Relief Program.
Shares dropped 2.7%.