A turnaround in personal spending and a flurry of acquisition activity sent stocks higher Monday, but it wasn't enough to salvage a topsy-turvy month. The major indexes fell in October.
A Commerce Department report showing that spending rose 0.5% in September -- reversing a 0.5% decline the month before -- came as another sign of the economy's resilience after hurricanes Katrina and Rita. Last week, the department reported better-than-expected gross domestic product growth of 3.8% for the July-September quarter.
Although the upswing in spending bolstered the retail and technology sectors, Steven Goldman, chief market strategist at Weeden & Co., also linked Monday's rally to a broad recovery from last week's lows and typical end-of-the-month trading as hedge funds and mutual funds tried to boost returns. He also cited strong gains in the European markets.
"Basically we had market sentiment get a bit too one-sided," Goldman said about recent down days on Wall Street. "Stocks were getting in place to rebound."
The Dow Jones industrial average rose 37.30 points, or 0.36%, to 10,440.07, after adding as much as 83 points late in the session.
Broader stock indicators also were higher. The Standard & Poor's 500 index was up 8.60 points, or 0.72%, at 1,207.01, and the Nasdaq composite index surged 30.42 points, or 1.46%, to 2,120.30.
Advancing issues topped decliners by about 3 to 1 on the New York Stock Exchange.
Bond yields edged lower, as investors grew wary of making any big bets on the eve of today's Federal Reserve policy meeting. The central bank is widely expected to raise its benchmark interest rate by a quarter of a percentage point, to 4%.
The yield on the U.S. Treasury's 10-year note fell to 4.55% from 4.57% on Friday. Bond yields move in the opposite direction of their prices.
Wall Street finished October lower despite back-to-back trading days of sharp gains, closing out an erratic month when investors sold stocks on seemingly any data hinting at a slowing economy or a whiff of higher inflation. On Friday, the Dow climbed almost 173 points, its biggest one-day leap since late April.
For the month, the Dow fell 1.22%, Nasdaq lost 1.45% and the S&P 500 was 1.77% lower.
Concerns about rising interest rates have haunted the market in recent weeks, with some afraid that the Federal Reserve will push rates too high and send the economy sliding.
