Financial companies led stock indexes to new two-year highs Tuesday after another big banking deal raised hopes that more acquisitions could be on the way. Toronto-Dominion Bank said it is buying Chrysler Financial, the automaker's old lending arm, from Cerberus Capital Management LP for $6.3 billion. It was the latest example of a relatively healthy Canadian bank buying a U.S. lender battered by the financial crisis. The S&P 500 closed above the level it reached on September 12, 2008, the last trading day before the collapse of Lehman Brothers at the height of the financial crisis. The Dow Jones industrial average is at its highest since August 29, 2008. Corporate mergers along with a tax cut package passed last week, have helped drive stocks up. The S&P 500 has jumped 6.3 percent this month and 12.5 percent this year. Investors like to see an increase in deals because it shows that companies are becoming more confident in the economy. Research firm Dealogic reported Tuesday that the total dollar amount of corporate deals has jumped 18 percent to $2.7 trillion so far this year compared with all of 2009. Caterpillar Incorporated, Chevron Corporation, and Google Incorporated have also made significant deals in 2010. The Dow rose 55.03, or 0.5 percent, to close at 11,533.16. The Dow is up 4.8 percent so far this month. The S&P 500 index rose 7.52, or 0.6 percent, to close at 1,254.60. The Nasdaq composite rose 18.05, or 0.7 percent, to 2,667.61. Financial companies were the best performers. JPMorgan Chase & Company rose the most among the 30 companies that make up the Dow. The stock rose 2.6 percent to $41. Bank of America Corporation, Goldman Sachs Group, and Wells Fargo Corporation all rose by more than one percent. Bond prices were relatively flat. The yield on the 10-year Treasury note edged down to 3.30 percent from 3.35 percent late Monday. The euro fell against the dollar after Portugal became the latest European country to be warned of a possible credit rating downgrade. More than two stocks rose for every one that fell on the New York Stock Exchange. Trading volume was 809 million shares.
