Stocks gain ground with China a focus for traders. The Dow ($INDU) added 21.39 points to a level of 9,626.80. The S&P 500 ($SPX) rose 6.61 points to 1,049.34. The Nasdaq ($COMPQ) tacked on 10.88 points to 2,091.78. Volume was a bit lighter on the session with the NYSE trading 1.21 billion shares and the Naz turning over 2.18 billion shares. Market breadth was positive on the session by a 20-to-10 and 16-to-11 margin on the Big Board and Naz respectively.

Futures pointed to a lower open to start the week following news that the U.S. had placed tariffs on tires from China. Analysts point out that creating a riff with China, our larger trading partner who also holds most our debt, isn't a good idea. President Obama announced the tariffs after unions stated that an influx of tires from China was hurting jobs in the U.S. Ultimately, traders overlooked this issue when reports surfaced that China was interested in purchasing AES (AES). This news pushed the global power company higher by 4.52 percent to a price o $14.79.

In other merger related news, a British newspaper reported that Deutsche Telekom (DT) is considering a bid for Sprint Nextel (S). This rumor initially pushed Sprint shares higher by more than 20 percent, but the company stated it was not aware of any merger intentions from DT. Sprint shares closed with a gain of 10 percent at a price of $4.15.

Dow component General Electric (GE) provided strength for the bulls, rising 4.64 percent to a price of $15.35. The $15 level was a key resistance level and once broken, further upside volume flowed into the stock. Traders have become more and more optimistic about the global economy and this has benefited conglomerates like GE. The stock traded nearly 140 million shares Monday, well above its 13 week daily average near 93 million.

Salix Pharmaceuticals (SLXP) was one of the biggest gainers on the session, rising 51 percent to $20.22. The company announced that late-stage studies for its irritable bowel syndrome drug Rifaximin had met main goals. Drug company Eli Lilly (LLY) saw its shares rise one percent after announcing $1 billion in cost cuts, which includes the cutting of 5,500 jobs over the next two years.

President Obama spoke today on the financial sector on the one year anniversary of the Lehman Brothers collapse. The President stated that government involvement in the markets is waning and that so far, tax payers had made a 17 percent return from the tax payer bailout. Traders will get a good idea of how the economy is faring this week with several top tier reports on tap. This deluge of data will begin Tuesday when reports on retail sales, producer prices and manufacturing activity in the New York region are released.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site