* Nasdaq closes at 14-year high
* Dollar General offers to buy Family Dollar
* Homebuilders' stocks rise after upbeat economic data
* Dow up 1 pct; S&P 500 up 0.9 pct; Nasdaq up 1 pct
(Updates to close)
By Akane Otani
NEW YORK, Aug 18 U.S. stocks surged on Monday,
with the Nasdaq closing at a 14-year high as increasing
homebuilder confidence and hopes for receding tensions in Russia
gave investors reasons to make bigger bets on the equity market.
The Nasdaq Composite ended above 4,508, marking the
first time since March 31, 2000, that the tech-heavy index
closed above 4,500 points. The S&P 500 extended last
week's gains, climbing to within 1 percent of an all-time high.
"You've got good economic data, good corporate earnings and
M&A deals moving the market forward, so the market is really
coming back strong," said Doug Cote, chief market strategist
with Voya Investment Management in New York.
"What you're seeing is defensive investors throwing in the
towel and saying, 'I gotta be a part of this.'"
After jumping as much as 20 percent on Friday, the CBOE
volatility index or the VIX, a barometer of investor
anxiety, fell 6.31 percent to close at 12.32 on Monday.
Homebuilders' stocks rose after the NAHB/Wells Fargo Housing
Market Index showed that homebuilder sentiment rose for the
third straight month in August.
The PHLX housing sector index climbed 1.7 percent,
lifted by a rally in major homebuilders, including PulteGroup
Inc, up 2.8 percent at $18.78, and D.R. Horton Inc
, up 1.4 percent at $21.13.
Ambiguity lingered in Russia, where tensions with Ukraine
have recently rattled markets. Russian officials said on Monday
that while all issues related to the country's humanitarian
convoy to Ukraine had been resolved, progress had not been made
on reaching a cease-fire.
Yet investors' appetite for stocks seemed little dampened by
headlines from abroad on Monday. Brent crude oil hit a 14-month
low as Kurdish forces made progress against militants in Iraq
and the Kiev military reported new successes against pro-Russian
separatists in Luhansk.
The Dow Jones Transportation Average climbed 1.7
Airline stocks soared as oil prices slid. Shares of United
Continental Holdings Inc rose 4 percent to $47.84 and
shares of Southwest Airlines, the S&P's third-biggest
percentage gainer, rose 3.6 percent to $30.82.
The Dow Jones industrial average jumped 175.83
points, or 1.06 percent, to close at 16,838.74. The S&P 500
rose 16.68 points, or 0.85 percent, to 1,971.74. The
Nasdaq Composite added 43.39 points, or 0.97 percent, to
close at 4,508.31.
A flurry of merger and acquisitions activity gave stocks a
boost. Discount retailer Dollar General Corp offered to
buy Family Dollar Stores Inc for $8.95 billion, driving
Dollar General shares up 11.6 percent to $64.14 and pushing
Family Dollar shares up 4.9 percent to $79.81.
The two stocks were the S&P 500's biggest percentage
Sensors and electrical controls maker Sensata Technologies
Holding NV said it would buy the Schrader group of
companies in a transaction that valued the business at $1
billion, including debt. Sensata shares rose 5.8 percent to
Shares of Urban Outfitters gained 2.4 percent to
close at $36.92 ahead of the clothing retailer's earnings
report, which were released after the bell. Following the
quarterly results, Urban Outfitters shares fell 1.7 percent in
extended-hours trading. The youth-oriented clothing retailer
beat analysts' estimates on earnings, but said comparable retail
segment net sales were flat in its latest quarter.
About 4.5 billion shares traded on all U.S. platforms,
according to BATS exchange data, compared with the five-day
average of 5.2 billion.
(Reporting by Akane Otani; Editing by Chizu Nomiyama, Nick
Zieminski and Jan Paschal)