On Monday, the 30-stock Dow Jones industrial average finished higher by 104.21 points, or 1.19%, at 8,848.15. The broad Standard & Poor's 500-stock index added 10.75 points, or 1.14%, to 951.13. The tech-heavy Nasdaq composite index gained 22.68 points, or 1.20%, to 1,909.29.

On the New York Stock Exchange, 23 stocks were higher in price for every seven that declined. Breadth on the Nasdaq was 18-9 positive.

Treasuries climbed. The dollar index fell. Gold and oil futures gained.

Caterpillar (CAT) led the way for blue chips after an analyst upgrade of the stock.

Shares of troubled commercial lender CIT Group (CIT) were up on hopes for a rescue package from bondholders. Bloomberg News reports CIT, which is seeking to ward off bankruptcy, may announce an agreement for $3 billion in financing from bondholders as soon as today, a person briefed on the board's deliberations said. The funds would give the New York-based company a chance to restructure its debt outside of bankruptcy, said the person, who declined to be identified because the talks are confidential. The lender's board accepted the deal late yesterday, the New York Times reported.

Separately, Red Hat (RHT) will be added to the S&P 500 index after the close of trading on July 24, replacing CIT.

Human Genome Sciences (HGSI) and GlaxoSmithKline (GSK) announced that Benlysta met the primary endpoint in BLISS-52, the first of two pivotal Phase 3 trials in patients with serologically active systemic lupus erythematosus [SLE].

In economic news Monday, U.S. leading indicators rose 0.7% in June to 100.9 from 100.2 in May and a revised 98.9 in April [was 99.0]. Seven of the 10 indicators posted gains, paced by the yield curve [0.35%] and building permits [0.22%]. This is a third straight monthly gain, with the 6-month difusion index holding at 50.0 for a second straight month, adding to beliefs the recession has bottomed.

The latest NABE survey shows 45% of economists believe sales have bottomed, while 41% see the economy starting to grow at end of year.

The market's focus will quickly shift to testimony from Fed Chairman Bernanke starting on Tuesday, says Action Economics. "Bernanke will not risk destabilizing yields and mortgage rates yet with any preemptive hawkishness and is expected to strike a balanced tone," says Action Economics.

In earnings news Monday, M&T Bank Corp. (MTB) posted second-quarter earnings per share under generally accepted accounting principles [GAAP] of $0.36, vs. $1.44 one year earlier, on a higher loan loss provision and higher noninterest expenses.

Johnson Controls (JCI) posted third-quarter EPS of $0.25 [excluding a non-recurring tax benefit], vs. $0.73, on a 29% sales decline. Wall Street was looking for EPS of $0.18.

Eaton Corp. (ETN) announced second-quarter operating EPS of $0.23, vs. $2.10, on a 32% sales drop. Wall Street was looking for EPS of $0.17. Eaton sees $0.90-$1.00 third-quarter operating EPS. It cut its 2009 guidance to $2.00-$2.20.

Hasbro Inc. (HAS) reported second-quarter EPS of $0.26, vs. $0.25, on a 1.0% revenue rise. Wall Street was looking for $0.23.

Halliburton Co. (HAL) posted second-quarter EPS of $0.30 [excluding items], vs. $0.55, on an 11% revenue decline. Wall Street was looking for EPS of $0.27.

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