NEW YORK -- Stocks are rallying on optimism that a deal to avoid the so-called "fiscal cliff" can be reached before Jan. 1 and strong quarterly earnings from corporations.
House Democratic leader Nancy Pelosi said over the weekend that she's hopeful lawmakers can reach a deal to avoid crippling tax hikes and budget cuts.
Within the first hour of trading, the Dow Jones industrial average was up about 150 points, 1.3%, and the broader Standard & Poor's 500 index was up 1.5%. The tech-laden Nasdaq composite index also was up 1.5%.
Intel's shares were lower, after opening 15 minutes late because the announcement came just before the opening bell that CEO Paul Otellini said he was retiring in May. Intel (INTC), the world's largest chipmaker, has not selected a successor.
Home improvement company Lowe's (LOW) said Monday that its third-quarter profit surged 76%. Its shares jumped 7%.
Tyson Foods (TSN), the country's largest meat company, easily topped Wall Street expectations Monday for its fourth-quarter earnings. The company's stock soared 8.2%.
World stock markets also rose Monday, registering optimism after negotiations late last week between President Obama and leaders of Congress raised hopes the U.S. would avoid its "fiscal cliff" before the end-of-the-year deadline.
Obama met with the top leaders of the House and Senate Friday to discuss ways to avert a series of automatic tax increases and spending cuts scheduled to take effect Jan. 1 in the absence of intervening action. U.S. lawmakers have said a budget deal before Christmas is possible.
Economists have been warning of the consequences if no action is taken. The spending cuts and higher taxes - plus the expiration of extended unemployment benefits - would mean that $671 billion is sliced out of the American economy next year. That's enough to throw the world's biggest economy into a recession.
European stocks were mostly higher. Britain's FTSE 100 rose 1.9% to 5,711.83. Germany's DAX 30 index gained 2.4% to 7,115.70. France's CAC-40 index advanced 2.3% to 3,417.48.
Investors looking for good deals following a global stock market slump that followed the U.S. presidential election helped push Asian stock markets higher.
Hong Kong's Hang Seng added 0.5% to 21,262.06 and South Korea's Kospi rose 0.9% to 1,878.10. Australia's S&P/ASX 200 gained 0.6% to 4,361.40. Mainland China's Shanghai Composite Index inched up 0.1% to 2,016.98. The smaller Shenzhen Composite Index rose marginally to 800.84.
"Because Hong Kong dropped for two weeks, maybe there is some bargain hunting," said Linus Yip, strategist at First Shanghai Securities in Hong Kong. He said that the budget negotiations in the U.S. are occupying the spotlight in the near term, but the ultimate issue is the state of the global economy.
Investors were particularly concerned by data last week showing U.S. industrial output falling 0.4% in October and the 17-country euro area falling into another recession.
The yen's recent weakness helped boost Japan's Nikkei 225 and its heavy orientation toward exporting companies. The index in Tokyo jumped 1.4% to close at 9,153.20, its highest close since Sept. 19.
A weak yen reduces the cost of Japanese products overseas, and that helps companies whose survival depends on sales beyond their home turf.
Benchmark oil for December delivery was up $1.22 to $86.67 per barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the euro rose to $1.2796 from $1.2727 late Friday in New York. The dollar was unchanged at 81.22 yen.