Stocks extend September rally

NEW YORK - Stocks rose to their highest level in four months Monday as hopes grew that the Federal Reserve would take more action to prop up the economy. The gains extended the market's rally into a fourth consecutive week.

Buying accelerated after the Standard & Poor's 500 index, the market measure professional traders use most often, broke through the high end of its recent range. Technical analysts see that as a bullish sign.

The Dow Jones industrial average jumped nearly 146 points to its highest close since May 13. A declaration from a group of economists that the recession ended in June 2009 was a mild positive, but that assessment was in line with what many analysts already believed.

Deal news also helped lift shares. IBM Corp. said it would buy data storage provider Netezza Corp. for about $1.7 billion in cash. Investors see acquisitions as a sign that companies are more comfortable spending cash to expand, and suggests that other stocks may become targets for buyers.

The Fed meets Tuesday to discuss interest rates, and investors are hoping for a sign that the central bank might make more moves to keep rates low. There is a growing expectation that the Fed's rate-setting committee could relaunch programs to buy Treasurys and mortgage bonds in an effort to stimulate the economy. At the very least, it might hint at future plans.

A number of economic indicators have topped forecasts in recent weeks, propelling stocks higher, but the economy is far from strong. If the Fed starts buying bonds again it could drive interest rates lower, enabling companies and consumers to get cheaper loans.

The Dow Jones industrial average rose 145.77 points, or 1.4 percent, to close at 10,753.62. The Dow has now risen in 12 of the last 14 days.

The Standard & Poor's 500 index rose 17.12, or 1.5 percent, to 1,142.71. The Nasdaq composite rose 40.22, or 1.7 percent, to 2,355.83.

The S&P 500 climbed solidly above the key technical level of 1,131, the high end of its recent trading range. The S&P briefly crossed that barrier on Friday for the first time since June 21, but not for long enough to convince analysts that the market had enough momentum to surge higher.

Many automatic buy and sell orders are set around such market milestones, and investors watch those levels closely for clues about the market's direction.

Investors have been encouraged by better economic reports this month, especially on jobs and manufacturing, to send stocks steadily higher in September.

Deal news sent IBM shares up $1.60, or 1.2 percent, to $131.79. Its acquisition target, Netezza, rose $3.67, or 14.9 percent, to $28.27.

Bonds edged higher as investors await word from the Fed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.70 percent from 2.74 percent late Friday.