Easing oil prices, better signs on economy lift stocks higher

NEW YORK - Stabilizing oil prices and more signs of a stronger economy sent stocks sharply higher Monday.

Oil prices fell to about $97 a barrel. Worries over the global oil market eased after reports that some Libyan ports reopened to oil tankers and Saudi Arabia was boosting exports. Prices surged above $100 a barrel last week as clashes between rebels and government-backed forces intensified in Libya.

The Commerce Department said consumer incomes rose by the largest amount in nearly two years in January, thanks to a tax cut that began last month. The head of the Federal Reserve Bank of New York, meanwhile, said the country's economic outlook had "improved considerably."

The Dow Jones industrials gained 95.89 points, or 0.79 percent, to close at 12,226.34. The Standard & Poor's 500 index rose 7.34, or 0.56 percent, to 1,327.22. The Nasdaq composite rose 1.22 points, or 0.04 percent, to 2,782.27.

All three major stock indexes posted their third straight month of gains. The last time that happened was in the three-month period that ended last April. The S&P 500 gained 3.2 percent in February, the Dow 2.8 percent, and the Nasdaq 3 percent. Those figures do not include dividends.

The S&P index has risen 5.5 percent in January and February, its fastest increase at the start of a year since it jumped 8.1 percent in the first two months of 1998, according to Howard Silverblatt, senior index analyst at S&P.

A new round of corporate deals also helped push some stocks higher. Ventas Inc., which owns senior-housing communities, said it would buy Nationwide Health Properties Inc. in a $5.8 billion deal that would create the nation's largest health-care real estate investment trust. Nationwide Health shares rose nearly 10 percent, while shares of Ventas fell more than 3 percent.

Australia's Equinox Minerals Ltd., a mining company, said it would make a hostile bid to acquire Canada's Lundin Mining Corp. for $4.9 billion in cash and stock. Shares of Lundin rose more than 19 percent while Equinox shares fell more than 8 percent. Both trade on the Toronto Stock Exchange.

The deals came just two days after Warren Buffett said in his annual letter to investors that he was "itchy" to make more big acquisitions for his company, Berkshire Hathaway Inc. Berkshire had $38 billion in cash at the end of last year.

Shares of Humana Inc. rose more than 3.8 percent after the health insurer raised its 2011 earnings forecast for the third time since November. The firm also said it regained a contract to provide coverage for three million active-duty and retired military members and their families in the South.

Amazon.com Inc. shares fell more than 2.2 percent after an analyst at UBS AG downgraded the company and said its new video-streaming service would cut into profit margins.