Banner day for the Dow
Dow surges 284, closing above 13,800 for first time, on aluminum merger, upbeat retail sales numbers.
NEW YORK (CNNMoney.com) -- The Dow soared about 280 points to a record close Thursday, posting its biggest gain in nearly 5 years, on a flurry of takeover activity and some upbeat retail sales numbers.
The Dow (up 257.20 to 13,835.07, Charts) surged nearly 284 points, or 2.1 percent, based on early tallies, its biggest one-day point gain since October 2002.
The broader S&P 500 (up 28.04 to 1,546.80, Charts) also finished in record territory after climbing 1.9 percent, eclipsing its prior record hit June 4.
The tech-laden Nasdaq (up 48.12 to 2,699.91, Charts) followed, soaring about 1.9 percent on the day.
Oil prices retreated as U.S. light crude for August fell 6 cents to $72.50 a barrel on the New York Mercantile Exchange.
Treasury prices eased, taking the yield on the 10-year note to 5.13 percent from the 5.09 percent level reached late Wednesday. Bond prices and yields move in opposite directions.
Here's what was moving near the close:
Stocks got a lift from merger activity as mining giant Rio Tinto (down $6.98 to $317.44, Charts) said it agreed to buy Alcan in a deal valued at $38.1 billion that would create the world's largest aluminum producer and thwart Alcoa's hostile bid for the Canadian company.
Alcan (up $8.60 to $98.20, Charts) shares jumped nearly 10 percent on the New York Stock Exchange. Alcoa (up $2.81 to $45.24, Charts, Fortune 500) stock also jumped - it was the biggest gainer in the Dow, up nearly 7 percent - on bets that it may too get bought out.
In other takeover news, Apollo Management's Hexion Specialty Chemicals said it agreed to buy chemical maker Huntsman in an all-cash deal worth $6.5 billion. Huntsman (down $1.21 to $26.36, Charts, Fortune 500) shares, however, fell over 4 percent on the New York Stock Exchange.
"There are investors such as ourselves who have been on sidelines for a while and they are taking this as an opportunity to play catch up," said Hugh Moore, founder and partner at Guerite Advisors.
But some better than expected retail sales readings for June provided a big boost for stocks as the consensus on Wall Street was the numbers would disappoint.
"Consumer are still spending so that was something for people to hang their hats on," said Moore.
Wal-Mart delivered some impressive results, reporting that same-store sales rose 2.4 percent, almost three times higher than forecasts. Wal-Mart (up $1.10 to $48.78, Charts, Fortune 500) shares climbed over 2 percent on the news.
The S&P Retail Index climbed 2.3 percent.
On the economic front, the trade gap widened in May, meeting economists expectations, with much of the rising gap due to oil prices.
Weekly jobless claims fell more than expected to 308,000 last week, the Labor Department reported.
The dollar eased slightly against the euro after sliding to record lows in the previous two sessions. The dollar edged higher versus the yen.
COMEX gold for August climbed $6.20 to $668.30.
Market breadth was positive. Advancers topped decliners on the New York Stock exchange by nearly 2 to 1 on volume of 1.53 billion shares. Winners beat losers on the Nasdaq by more than 2 to 1 on volume of 2.14 billion shares.